A company is considering two mutually exclusive investment proposals. Their

expected cash flow streams are given as follows:

Year Proposal X $($Rs$.)$ Proposal Y $($Rs$.)0-5,00,000-7,00,00011,45,0001,00,00021,45,0001,10,00031,45,0001,30,00041,45,0001,50,00051,45,0001,60,00061,45,0001,50,0007-----1,20,0008-----1,20,0009-----1,10,000$

$10-----1,00,000$

The company employs risk adjusted method of evaluating risky projects and selects

the appropriate required rate of return as follows:

Project Pay back Required Rate of Return

Less than $1$ year $8\%$

$1$

$5$ years $10\%$

$5$

$10$ years $12\%$

Over $10$ years $15\%$

Which proposal should be acceptable to the company?