A firm is considering two mutually exclusive projects with the following cash flows:

	Project X	Project Y
Year 1	$ 40,000	$120,000
Year 2	80,000	80,000
Year 3	120,000	40,000

Each project requires an investment of $100,000. The cost of capital is 10%. Which project will have the higher net present value?

a.

Project X

b.

Project Y

c.

Project X and Project Y will have the same net present value.

d.

Not enough information is given.