Saliva Water Services is considering two mutually exclusive projects. They are considering for two projects which are Project X and Project Y. The cost of capital is 12 percent. Each project cost RM10,000. The expected cash flows are as follows:

0 1 2 3 4

Px: -RM10,000 RM6,500 RM3,000 RM3,000 RM1,000

Py: -RM10,000 RM3,500 RM3,500 RM3,500 RM3,500

1. Compute the Net Present Value (NPV) for both projects.

(8 marks)

2. Calculate the payback period (PP)

(8 marks)

3. Find the Profitability Index (PI) for both projects.

(4 marks)