​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

---

Definitions:

Youngest Seafloor

Those parts of the oceanic crust that have most recently formed at mid-ocean ridges due to seafloor spreading.

Deepest Seafloor

The deepest parts of the ocean floor, often found in trenches and abyssal plains, with the Mariana Trench being the deepest known point.

Hot Spots

Locations on the Earth's surface that have experienced extensive volcanic activity, typically situated above a stationary plume of hot mantle material.

Hot Spots

Areas of the Earth's mantle that are anomalously hot compared to surrounding areas, causing volcanic activity on the surface.