Question 3

Consider the following information for Project X and Project Y:

Year	Project X	Project Y
0	-60000	-130000
1	15000	25000
2	20000	30000
3	25000	35000
4	30000	40000
5	35000	45000
6	40000	50000

Requirements:

1. Calculate the NPV for both projects using an 8% discount rate.
2. Determine the IRR for each project.
3. Calculate the traditional payback period for both projects.
4. Analyze and explain which project(s) should be selected if they are independent.
5. Analyze and explain which project should be selected if they are mutually exclusive.