Q3. Suppose you are working as project manager in a multinational firm where you must analyze two projects, X and Y. Each project has an initial investment of $10,000, and the firms WACC is 12%. The expected net cash flows are as follows: 0 1 2 3 4 | | | | | Project X -$10,000 $6,500 $3,000 $3,000 $1,000 Project Y -$10,000 $3,500 $3,500 $3,500 $3,500 a. Calculate each projects payback, NPV, IRR and PI. b. Suppose Project X is expected to produce net income of $5,500 in year 1, $2,000 in years 2 and 3, and -$200 in year. Project Ys expected net income is $2,500 in years 1-4. Both projects will be fully depreciated over the life of the project. Calculate each projects ARR.