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A) Blue Inc. with its cost of capital 10%, is evaluating two mutually exclusive projects with the following expected cash flows: Year 0 1 Cash

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A) Blue Inc. with its cost of capital 10%, is evaluating two mutually exclusive projects with the following expected cash flows: Year 0 1 Cash Flows X Y ($100,000) ($100.000 $10,000 $70,000 $60,000 $50,000 $80,000 $20,000 3 Requirements: 1) Based on NPV, which project is preferable? 2) Based on IRR, which project is preferable? 3) Based on Profitability Index, which project is preferable? 4) Based on Payback period, which project is preferable? 5) If there a cross-over rate, what is it? 6) Based on your summary assessment, which project is preferable

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