Question: Galaxy Corp. has to choose between two mutually exclusive projects. If it chooses project A , Galaxy Corp. will have the opportunity to make a
Galaxy Corp. has to choose between two mutually exclusive projects. If it chooses project A Galaxy Corp. will have the opportunity to make a similar investment in three years. However, if it chooses project it will not have the opportunity to make a second investment. The following table lists the cash flows for these projects. If the firm uses the replacement chain common life approach, what will be the difference between the net present value NPV of project A and project B assuming that both projects have a weighted average cost of capital of
Cash Flow
tableProject AProject BYear :$Year :$
$
$
$
$
$
Galaxy Corp. is considering a fouryear project that has a weighted average cost of capital of and a NPV of $ Galaxy Corp. can replicate this project indefinitely. What is the equivalent annual annuity EAA for this project?
$
$
$
$
$
Galaxy Corp. has to choose between two mutually exclusive projects. If it chooses project Galaxy Corp. will have the opportunity to make a similar investment in three years. However, if it chooses project it will not have the opportunity to make a second investment. The following table lists the cash flows for these projects. If the firm uses the replacement chain common life approach, what will be the difference between the net present value NPV of project A and project B assuming that both projects have a weighted average cost of capital of
Cash Flow
tableProject AProject BYear :$Year :$
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