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Which of the following statements about the equivalent annual annuity approach for capital budgeting is least accurate? A. A 5-year project has a NPV of $2,000, if the firm's cost of capital is 10% the equivalent annual annuity is $725. B. The replacement chain approach assumes that it is possible to make continuous replacements each time the asset's life ends. C. When comparing mutually exclusive projects with unequal lives, replacement chain analysis yields the same decision as the equivalent annual annuity method. |