A company is considering the following two projects:

• Project X
  • Initial investment: $100,000
  • Year 1: $40,000
  • Year 2: $50,000
  • Year 3: $60,000
  • IRR: 18%
• Project Y
  • Initial investment: $150,000
  • Year 1: $60,000
  • Year 2: $70,000
  • Year 3: $80,000
  • IRR: 15%

The discount rate is 12%.

a) Calculate the NPV for both projects.

b) Determine which project to invest in based on NPV.

c) Discuss how the scale of investment impacts the decision despite different IRRs