8 A company is evaluating two alternative projects, X and Y, each of which will cost

£50,000. Project X is expected to generate £20,000 p.a. for three years and project Y is expected to generate £15,000 p.a. for four years. At the end of each project, assets will be sold for £10,000 relating to project X and £15,000 relating to project Y. The discount rate is 5% and relevant discount factors are: year 1: 0.952, year 2: 0.907, year 3: 0.864 and year 4: 0.823. What is the net present value of each project?

(a) Project X £4,460, project Y £3,190

(b) Project X £20,000, project Y £25,000

(c) Project X £13,100, project Y £15,535

(d) Project X £63,100, project Y £65,535