Assume you are the chief financial officer at Porter Memorial Hospital. The CEO has asked you to analyse two proposed capital investments - Project X and Project Y. Each project requires a net investment outlay of $10,000, and the cost of capital for each project is 12%. The projects' expected net cash flows as as follows:

Year Project X Project Y

0 ($10,000) ($10,000)

1 6,500 3,000

2 3,000 3,000

3 3,000 3,000

4 1,000 3,000

a. Calculate each project's payback period, NPV, and IRR

b. Which project or (projects) is financially acceptable? Explain your answer.