Question: M corporation is considering two mutually exclusive projects. Both require an initial investment of $100,000 and their risks are average for the firm. Project A

M corporation is considering two mutually exclusive projects. Both require an

M corporation is considering two mutually exclusive projects. Both require an initial investment of $100,000 and their risks are average for the firm. Project A has an expected life of 2 years with after-tax cash inflows of $50,000 and $70,000 at the end of Years 1 and 2, respectively. Project B has an expected life of 3 years with after-tax cash inflows of $60,000 at the end of each of the next 3 years. The firm's WACC is 8%. Use the replacement chain approach to determine the NPV of the most profitable project.(2 points)

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