A company is considering two investment projects, Project X and Project Y, with the following cash flows:

Project X:

• Initial Investment: $500,000
• Year 1: $100,000
• Year 2: $150,000
• Year 3: $200,000
• Year 4: $250,000
• Year 5: $300,000

Project Y:

• Initial Investment: $600,000
• Year 1: $200,000
• Year 2: $200,000
• Year 3: $200,000
• Year 4: $200,000
• Year 5: $200,000

Requirements:

1. Calculate the payback period for both projects.
2. Determine the net present value (NPV) for both projects assuming a discount rate of 10%.
3. Calculate the internal rate of return (IRR) for both projects.
4. Recommend which project should be selected based on NPV and IRR.