The following table gives information regarding the two mutually exclusive Projects X and Y.

Period Net cash flows from Project X Net cash flows from Project Y 0 – 700 – 7000 1 450 4100 2 450 4100

(a) Compute the NPV at 10% discount rate.

(b) Compute the IRR.

(c) If there is no capital rationing, which project should be selected?

(d) If there is capital rationing, how would you approach the project selection problem?