Consider the following two cash flows Project X and Project Y. Assume the opportunity cost is 15%. Project X Year Cashflow Project Y Year 0500 Cashflow 301 100 Jun07500 142 300 Feb08 100 143 400 Feb09 300 144 600 Feb10 400 145 800 Feb11 600 1461800 Feb12 800 13Feb131800 1.1. Compute their respective net present values (NPV), use Excel to draw a graph of the NPV of each one these project as a function of the discount rate, and then find their respective internal rates of returns IRRs accurate to at least 2 decimal places. [10+6+10+10] 1.2. Assume there is only the possibility to invest in one of the two projects, make a comprehensive report (8 lines maximum) justifying why you would likely invest in one of the projects and not the other one. [5] 1.3. If the first cash flow of Project Y occurs on the 14-Feb-07, which one of the 2 projects is preferable? Justify (3 lines maximum). [4]

Consider the following two cash flows Project X and Project Y. Assume the opportunity cost is 15% Year 0 1 2 Project X Cashflow -500 100 300 400 Project Y Year Cashflow 30-Jun-07 -500 14-Feb-08 100 14-Feb-09 300 14-Feb-10 400 14-Feb-11 600 14-Feb-12 800 13-Feb-13 -1800 3 4 5 600 800 -1800 6 1.1. Compute their respective net present values (NPV), use Excel to draw a graph of the NPV of each one these project as a function of the discount rate, and then find their respective internal rates of returns IRRs accurate to at least 2 decimal places. [10+6+10+10)