​Mulroney Corp

question 51

Multiple Choice

​Mulroney Corp.is considering two mutually exclusive projects.Both require an initial investment of $10,000 at t = 0.Project X has an expected life of 2 years with after-tax cash inflows of $6,000 and $7,800 at the end of Years 1 and 2,respectively.In addition,Project X can be repeated at the end of Year 2 with no changes in its cash flows.Project Y has an expected life of 4 years with after-tax cash inflows of $4,300 at the end of each of the next 4 years.Each project has a WACC of 8%.Using the replacement chain approach,what is the NPV of the most profitable project?

• A)​$4,242
• B)​$4,246
• C)​$4,286
• D)​$4,325
• E)​$4,433

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