Company ABC is evaluating two independent projects, Project X and Project Y, both requiring an initial outlay of $20,000.

• Project X generates cash flows of $6,000 annually for 5 years.
• Project Y generates cash flows of $8,000 annually for 3 years.

Requirements:

• Compute the payback period for each project.
• Calculate the NPV using a discount rate of 8%.
• Determine the IRR for each project.
• Which project should be accepted based on NPV?