MAS14-Business Finance-T2 2020 - Assessment Paper Case Study 3 (Total 25 Marks) Project evaluation You are a financial analyst for the Edelman Engineering out Ltd The director of capital budgeting has asked you to analyse two proposed capital investments, Projects X and Y. The cost of capital for each project is 13% The projects' initial cost and expected net cash flows are as follows. The two projects are mutually exclusive projects Year 0 1 2 3 4 CASH FLOW $245 000 34000 49000 51 000 325 000 CASH FLOWLY $53 000 31 900 21 800 17300 16 200 Required 1 If you apply the pay back criterion which project will you choose? Why? (10 marksi 2 If you apply the NPV critenon, which project will you choose? Why (10 marks 3. If you apply the IRR criterion, which project will you choose? Why? 15 marks