Iota Enterprises is considering two mutually exclusive projects:

• Project X: Initial outlay: $30,000, Life: 7 years, Required return: 11%
• Project Y: Initial outlay: $35,000, Life: 6 years, Required return: 12%
• Cash flows:
  • Project X: $7,000 per year
  • Project Y: $9,000 per year for 3 years, $5,000 per year for the next 3 years
• Requirements:

1. Compute the NPV for each project.
2. Compute the Profitability Index for each project.
3. Determine the Discounted Payback Period for each project.
4. Make a recommendation based on NPV and PI.