Question: KOMH Blankets Inc. is considering two mutually exclusive projects. Both projects require an initial aftertax investment of ( $ 8 9 , 0

KOMH Blankets Inc. is considering two mutually exclusive projects. Both projects require an initial aftertax investment of \(\$ 89,000\) and are typical average-risk projects for the firm. Project \( A \) has an expected life of 3 years with after-tax cash inflows of \(\$ 25,000\) at the end of years 1 and 2 and \(\$ 75,000\) at the end of Year 3. Project \( B \) has an expected life of 9 years with after-tax cash inflows of \(\$ 18,500\) at the end of each of the next 9 years. The firm's WACC is \(13\%\).
If the projects cannot be repeated, which project should be selected if KOMH Blankets uses NPV as its criterion for project selection (A or B)?
Assume that the projects can be repeated and that there are no anticipated changes in the cash flows. Using the replacement chain analysis, what is the NPV of Project A Extended?
If the projects can be repeated, which project should be selected (A or B)?
Using the equivalent annual annuity (EAA) method, which project should you select (A or B)?
What is the EAA of the project selected?
KOMH Blankets Inc. is considering two mutually

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