Year	Proj Y	Proj Z
0	($210,000)	($210,000)
1	200,000	95,000
2	95,000	78,000
3		73,000
4		87,500

The projects provide a necessary service, so whichever one is selected is expected to be repeated into the foreseeable future. Both projects have an 12% cost of capital.

9. Now assume that the cost to replicate Project Y in 2 years will increase to $2,500,000 because of inflationary pressures. How should the analysis be handled now, and which project should be chosen?