projects Nile Inc. wants to choose the better of two mutually exclusive projects that expand warehouse capacity. The projects cash flows appear below. The cost of capital is 15%. Project X Project Y Initial investment (CFO) -$5000,000 -$325,000 Year(t) Cash inflows (CFf) 1 $100,000 $140,000

2 120,000 120,000

3 150,000 95,000

4 190,000 70,000

5 250,000 50,000

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1. Calculate the IRR to the nearest whole percent for each of the projects.
2. Assess the acceptability of each project on the basis of the IRRs found in part a.
3. Which project, on this basis, is preferred?