Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table: The firm's cost of capital is 17%

Initial investment

Project X Project Y

$500,000 $340,000

Year Cash inflows 1 $110,000 $160,000 2 $150,000 $100,000 3 $140,000 $115,000 4 $210,000 $70,000 5 $230,000 $60,000

a) The internal rate of return (IRR) of project X is ___%

Is project X acceptable on the basis of IRR? (select best)

a) Yes

b) No

b) The internal rate of return (IRR) of project Y is ___%

Is project Y acceptable on the basis of IRR? (select best)

a) yes

b) no

Which project is preferred? (select best answer)

a) Neither

b) Project Y

c) Project X