26. A firm whose cost of capital is 20% is considering two mutually exclusive projects, X and Y, the details of which are:

Project X

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Project Y

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Capital Investment 1,00,000 80,000 Net Cash flow:

Year 1 30,000 40,000 2 30,000 35,000 3 30,000 30,000 4 30,000 25,000 5 30,000 10,000 Compute Net Present Value for the two projects and comment on the result.

[ICWA Final Dec. 1994]