Beta Inc is evaluating two investment opportunities, Project X and Project Y.

Project X

• Year 0: -$120,000
• Year 1: $40,000
• Year 2: $50,000
• Year 3: $60,000
• Year 4: $70,000

Project Y

• Year 0: -$130,000
• Year 1: $30,000
• Year 2: $40,000
• Year 3: $50,000
• Year 4: $80,000

The discount rate for both projects is 10%.

Requirements:

1. Calculate the internal rate of return (IRR) for each project.
2. Compare the IRRs and recommend which project should be accepted.
3. Calculate the modified internal rate of return (MIRR) for each project.
4. Determine which project to accept based on the MIRR.
5. Analyze the sensitivity of NPV to changes in the discount rate for each project.