Question 3

Scenario: Analyze the cash flows for Project X and Project Y:

Year	Project X	Project Y
0	-70000	-120000
1	16000	30000
2	14000	25000
3	11000	35000
4	10000	40000
5	9000	45000
6	8000	50000

Requirements: a. Compute the NPV for each project assuming an 8 percent required rate of return. b. Calculate the IRR for each project. c. Find the traditional payback period for each project. d. Recommend which project(s) should be selected if they are independent. e. Recommend which project should be selected if they are mutually exclusive.