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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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.
Transcribed Image Text: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.
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