The following table presents the forecasted cash flows for Project X and Project Y. These two

projects are mutually exclusive.

Time Project X Project Y

0 -45,000 -49,000

1 7,000 26,000

2 9,000 21,000

3 19,000 13,000

4 32,000 7,000

Construct a NPV profile to illustrate whether the project choice is dependent upon the discount

rate. Your NPV profile should include the following information:

a. The NPV of both projects at discount rates of 0%, 10%, and 20%,

b. The IRR of both projects,

c. The incremental IRR (crossover rate) for the two projects (if it exists).

Clearly explain the conclusions to be drawn from the NPV profile