Question: Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate capital expenditure projects. Assuming the two projects

Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate

capital expenditure projects. Assuming the two projects have the costs and cash flows shown below, determine the

NPV for each using a replacement chain.

a.

NPVs = $8,860: NPVT = $109,240

b.

NPVs = $14,690: NPVT = $109,240

c.

None of these are correct

d.

NPVs = $40,020: NPVT = $109,240

Dorati Inc. is considering two mutually exclusive
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