Capital Budgeting Homework Suppose you work as a financial analyst for XYZ corp. The director of new development asks you to analyze two project proposals, Project X and Project Y. Each project has an initial cost of $10,000, and the cost of capital for each is 12%. The projects' expected net cash flows are as follows: Expected Net Cash Flows Year Project X Project Y 0 -$10,000 -$10,000 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000 3,500 Calculate each project's payback period, net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI). Which project or projects should be accepted if they are independent? Which project should be accepted if they are mutually exclusive? At what cost of capital would the two projects have the same NPV? (What is the crossover point where NPV and IRR give differing rankings for mutually exclusive projects?)