Question: Please answer Parts B and C fully with equations and excel formulas shown. Expected Net Cash Flows Year Project T Project F 0 -100,000 -100,000

Please answer Parts B and C fully with equations and excel formulas shown.

Expected Net Cash Flows
Year	Project T	Project F
0	-100,000	-100,000
1	75,000	40,000
2	65,000	42,000
3	--	44,000
4	--	46,000

The projects provide a necessary service, so whichever one is selected is expected to be repeated into the foreseeable future. Both projects have a 12% cost of capital.

a. What is each projects initial NPV without replication?

Project T NPV	$18,781.89
Project F NPV	$29,748.59

b. What is each projects equivalent annual annuity?

c. Suppose you replicate Project T so that it has the same life as Project F. Which project would you choose?

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