Refer to Damon Electronics Company information below, what are the NPV of project X and the NPV of project Y? (Note: Keep your answer. There are two other related questions.)

Use the following information for the three questions referring to Damon Electronics Company:

You are a financial analyst for Damon Electronics Company. The director of capital budgeting has asked you to analyze two proposed capital investments, project X and project Y. Each project has a cost of $10,000, and the cost of capital for each project is 12%. The projects expected net cash flows are as follows:

Project X Project Y

Period Cash flows Cash flows

0 $10,000 $10,000

1 6,500 1,000

2 3,000 1,000

3 3,000 7,000

4 1,000 7,000