28.090 50,000 44.000 25,000 15.0 Laura Shenko is currently evaluating two mutually exclusive projects. Project G is a 2-year project with an NPV of $34,600. Project H is a 5-year project with an NPV of $66,700. Using the replacement chain method and a cost of capital of 12%, which project should you choose? a. Choose Project G since its extended NPV is $39,600 greater than the extended NPV for Project H. b. Choose Project G since its extended NPV is $28,040 greater than the extended NPV for Project H. c. Choose Project G since its extended NPV is $16,277 greater than the extended NPV for Project H. d. Choose Project G since its extended NPV is $13,438 greater than the extended NPV for Project H. e. Choose Project G since its extended NPV is $11,129 greater than the extended NPV for Project H.

28.090 50,000 44.000 25,000 15.0 Laura Shenko is currently evaluating two mutually exclusive projects. Project G is a 2-year project with an NPV of $34,600. Project H is a 5-year project with an NPV of $66,700. Using the replacement chain method and a cost of capital of 12%, which project should you choose? a. Choose Project G since its extended NPV is $39,600 greater than the extended NPV for Project H. b. Choose Project G since its extended NPV is $28,040 greater than the extended NPV for Project H. c. Choose Project G since its extended NPV is $16,277 greater than the extended NPV for Project H. d. Choose Project G since its extended NPV is $13,438 greater than the extended NPV for Project H. e. Choose Project G since its extended NPV is $11,129 greater than the extended NPV for Project H.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
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