Crockett Graphic Designs Inc. is considering two mutually exclusive projects. Both projects require an initial after-tax investment of $10,000 ana the firm. Project A has an expected ife of 2 years with after-tax cash inflows of $6,000 and $9,000 at the end of Years 1 and 2, respectively. Project B has an expected ife of 4 years with after-tax cash inflows of $4,000 at the end of each of the next 4 years. The firm's WACCis 12%. typical average-risk a. the projects cannot be repeated, which project should be selected if Crockett uses NPV as its criterion for project selection? Project Selectv should be selected. b. Assume that the projects can be repeated and that there are no anticipated changes in the cash fows. Use the replacement chain analysis to determine the NPV of the project selected. Do not round intermediate calculations. Round your answer to the nearest cent. Since Project Seect s extended NPV-S R should be selected over Project Selectwith an NPV-$ C Make the same assumptions as in part b. Using the equivalent annual annuity (EAA) method, what is the EAA of the project selected? Project-Select-vshould be selected

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.