Assume you are the chief financial officer at Lehman Memorial Hospital. The CEO has asked you to analyze two proposed capital investment Project X and project Y each project requires a net investment outlay of $12,000 and the opportunity cost of capital for each project is 14% the project's expected net cash flows are as following Year Project x Project Y 0 (12,000) (12,000) 1. 6,600 3,500

2. 3,500 3,500

3. 3,500 3,500

4. 3,500 3,500

a. Calculate each projects payback, NPV and IRR.

b. Which project is financially acceptable? Explain