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A firm purposes to adopt two projects X and Y. The de- tails are given below: Initial investment Cash flow during economic life: I

A firm purposes to adopt two projects X and Y. The de- tails are given below: Initial investment Cash flow during economic life: I year Il year HI year TV year V year Project X Rs. 6,00,000 1,50,000 1,50,000 1,50,000 Project Y Rs. 6,00,000 30,000 50,000 1,00,000 1,50,000 2,00,000 Rate of discount 15% P.V. factor at 15% - 0.870; 0.756, 0.658; 0.572 and 0.497. Compute NPV of both the project and examine which project is to be accepted.

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