A business is evaluating two different projects with the following details:

Project X:

• Initial cost: €1,000,000
• Annual cash inflows: €250,000 for 5 years
• Depreciation: Straight-line to zero
• Salvage value: €100,000
• Required rate of return: 11%

Project Y:

• Initial cost: €800,000
• Annual cash inflows: €200,000 for 6 years
• Depreciation: Straight-line to zero
• Salvage value: €80,000
• Required rate of return: 9%

Required:

1. Calculate the NPV for both projects.
2. Determine the IRR for both projects.
3. Assess the payback period for both projects.
4. Calculate the discounted payback period.
5. Recommend which project should be selected based on the financial metrics.