Consider two projects, T and F$,$ which are mutually exclusive, have unequal lives, and are repeatable. Their cash flows are depicted in the table below:

Project Year $0$

Year $1$

Year $2$

Year $3$

Year $4$

T $,$$$105$ million $$62$ million $$62$ million

F $$105$ million $$33$ million $$33$ million $$33$ million $$33$ million

Assuming a WACC of $7\mathrm{.}5\%,$ use the replacement chain approach $($RCA$)$ to compare the projects and pick the better choice, given repetition. Note that the investment in project $T$ rises by $7\%$ when repeated, but the other cash flows stay the same.

Project T is better as its NPV is higher by $$89,657$

Project $F$ is better as its NPV is higher by $$89,657$

Project T is better as its NPV is higher by $$797,274$

Project $F$ is preferable without repetition, and $T$ is preferable with repetition

Project $F$ is better as its NPV is higher by $$797,274$