What is each projects initial npv without replication what, Financial Management

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What is each projects initial npv without replication what

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 project’s initial NPV without replication?

b. What is each project’s equivalent annual annuity?

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

please show all work in excel/all formulas

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Financial Management: What is each projects initial npv without replication what

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