Expansion versus replacement cash flows   Tesla Systems hasestimated the cash flows over the​ 5-year lives for two​ projects,A and B. These cash flows are summarized in the followingtable.  ​(Click on the icon located on the​ top-right corner of thedata table below in order to copy its contents into a​spreadsheet.)
| Project A | Project B | |
Initial investment | −$4,652,000 | $1,543,000​* |
Year | Operating cash flows |
1 | $556,000 | $371,000 |
2 |   925,000 | 371,000 |
3 |   1,359,000 |   371,000 |
4 |   2,224,000 |  371,000 |
5 |    3,400,000 |   371,000 |
​*After-tax cash inflow expected from liquidation.
a. If Project​ A, which requires an initial investment of−$4,652,000​, is a replacement for Project B and the $1,543,000initial investment shown for Project B is the​ after-tax cashinflow expected from liquidating​ it, what would be the net cashflows for this replacement​ decision?
b. How can an expansion decision such as project A be viewed asa special form of a replacement​ decision? Explain.
