Question: Zelluose Corp. is considering two mutually exclusive projects, a and b. project a cost $50,000 and is expected to generate $38,000 in year one and
Zelluose Corp. is considering two mutually exclusive projects, a and b. project a cost $50,000 and is expected to generate $38,000 in year one and $30,000 in year two. Project b costs $70,000 and is expected to generate $24,000 in year one $32,000 in year two, $23,000 in year three and $29,000 in year four. Zelluose Corp has required rate of return for these projects is 12%.Which project would you recommend using the replacement chain method to evaluate the projects with different lives?
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