Question: Luthering Corp. has to choose between two mutually exclusive projects. If it chooses project A, Luthering Corp. will have the opportunity to make a similar

Luthering Corp. has to choose between two mutually exclusive projects. If it chooses project A, Luthering Corp. will have the opportunity to make a similar investment in three vears. However, if it chooses profect 8 , it witl not have the opportunity to make a second investiment. The following tabfe lists the cash fiows 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 13% ? $15,870 513,490 $9,522 311,903 $15,870$13,490$9,522$11,903$12,696 Luthering Corp. is considering a four-year project that has a weighted average cost of capital of 12% and a NPV of $29,567. Luthering Corp. Can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $8,274 $9,734 $10,707 $10,221 $11,194
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