Question: 20. Foster Corp. is considering two mutually exclusive projects. Both require an initial investment of $20,000 at t = 0. Project X has an expected

20. Foster Corp. is considering two mutually exclusive projects. Both require an initial investment of $20,000 at t = 0. Project X has an expected life of 2 years with after-tax cash inflows of $9,000 and $11,800 at the end of Years 1 and 2, respectively. Project Y has an expected life of 4 years with after-tax cash inflows of $5,400 at the end of each of the next 4 years. Each project has a WACC of 8%. Use the replacement chain approach to determine the NPV of the most profitable project.

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