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


Praxis Corp. has to choose between two mutually exclusive projects. If it chooses project A, Praxis Corp. will have the opportunity to make a similar investment in three years. However, if it chooses project B, it will not have the opportunity to make a second investment. The following table lists cash flows for these projects. If the firm uses the replacement chain (common life) approach, what will be the difference between the nesent value (NPV) of project A and project B, assuming that both projects have a weighted average cost of capital of 12% ? $10,172$11,867$16,953$12,715$13,562 Praxis Corp. is considering a three-year project that has a weighted average cost of capital of 10% and a NPV of $85,647. Praxis Corp. can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $29,274$32,718$34,440$36,162$37,884 Praxis Corp. has to choose between two mutually exclusive projects. If it chooses project A, Praxis Corp. will have the opportunity to make a similar investment in three years. However, if it chooses project B, it will not have the opportunity to make a second investment. The following table lists cash flows for these projects. If the firm uses the replacement chain (common life) approach, what will be the difference between the nesent value (NPV) of project A and project B, assuming that both projects have a weighted average cost of capital of 12% ? $10,172$11,867$16,953$12,715$13,562 Praxis Corp. is considering a three-year project that has a weighted average cost of capital of 10% and a NPV of $85,647. Praxis Corp. can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? $29,274$32,718$34,440$36,162$37,884
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