Question: Your company is considering two projects and has estimated the following cash flows: Year Project A Project B 0

Your company is considering two projects and has estimated the following cash flows:

Year Project A Project B

$0 - 15, 000 - 20, 000$

$1 10, 000 10, 000$

$2 10, 000 20, 000$

If project B expands your manufacturing capacity by building a separate factory, what is the relevant cash flow for evaluating project B in year $2 ?$

If project B replaces an existing factory $($ project A $),$ what is the relevant cash flow for evaluating project B in year $2 ?$

If project B replaces an existing factory $($ project A $),$ what is the relevant cash flow for evaluating project B in year $0 ?$

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