Although the replacement chain approach is appealing for dealing with mutually exclusive projects that have different lives,it is not used in practice because not projects meet the assumptions the method requires.

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The replacement chain approach is used in practice for dealing with mutually exclusive projects that have different lives. It is a method to compare projects by extending their cash flows over a common period, making it easier to evaluate their worth or profitability over the same timeframe. The method is practical and useful, especially in capital budgeting decisions, despite its assumptions.

Although the Replacement Chain Approach Is Appealing for Dealing with Mutually