is my response accurate Consider two projects, T and F, which are mutually exclusive, have unequal lives, and arerepeatable. Their cash flows are depicted in the table below:Project Year 0Year 1Year 2Year 3Year 4T-$95 million$55 million$55 millionF-$95 million$30 million$30 million$30 million$30 millionAssuming a WACC of 9.5%, use the replacement chain approach (RCA) to compare theprojects and pick the betterchoice, given repetition. Note that the investment in project Trises by 1% when repeated, but the other cash flows stay the same.O Project T is better as its NPV is higher by $88.676O Project F is better as its NPV is higher by $35,520O Project T is better as its NPV is higher by $35,520O Project F is better as its NPV is higher by $88,676O Project T is better without repetition, but project F is better with repetition

Step 1: Calculate NPV for Project TCalculate NPV for Project T with a WACC of 9.5% and considering…

Answered: Consider two projects, T and F, which…

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 13P

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Consider two projects, T and F, which are mutually exclusive, have unequal lives, and are repeatable. Their cash flows are depicted in the table below: Project Year O Year 1 Year 2 Year 3 Year 4 T -$105 million $62 million $62 million F -$105 million $33 million $33 million $33 million $33 million Assuming a WACC of 7.5%, use the replacement chain approach (RCA) to compare the projects and pick the better choice, given repetition. Note that the investment in project T rises by 7% when repeated, but the other cash flows stay the same. Project T is better as its NPV is higher by $89,657 O Project F is better as its NPV is higher by $89,657 O Project T is better as its NPV is higher by $797,274 O Project F is preferable without repetition, and T is preferable with repetition O Project F is better as its NPV is higher by $797,274
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please give Step by Step Solution otherwise i give you DISLIKE !
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