Answer:
Expansion project seeks profitability while Replacement Projects requires decrease in cost production.
Explanation:
The Expansion projects is where the company seeks out to increase their sales or to introduce new product line in the market, thereby increasing the overall profitability of the company. Replacement project on the other hand is where an organisation replaces out old or outdated equipment to replace them with new equipment resulting in lower cost production and/or increase in the sales of current product.
Analysis for replacement project is usually focused on the cost savings while in case of expansion projects the are of focus is increase in sales or cash flows. Moreover, the replacement project is related to the incremental cash flows but in the case of expansion projects it is about new cash flows.
