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Claire Inc. is considering two mutually exclusive projects. Both require an initial investment of $16,000 at t = 0. Project S has an expected life of 2 years with after-tax cash inflows of $8,000 and $12,000 at the end of Years 1 and 2, respectively. Project L has an expected life of 4 years with after-tax cash inflows of $5,500 at the end of each of the next 4 years. Each project has a WACC of 12.00%, and neither can be repeated. The controller prefers Project S, but the CFO prefers Project L. How much value will the firm gain or lose if Project L is selected over Project S? Show work.

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