The two projects are as follows. Discount rate = 12%.

Project X Project Y

Year Cash-Flow Cash-Flow

0 -$100,000 -$100,000

1 50,000 10,000

2 40,000 30,000

3. 30,000 40,000

4. 20,000 70,000

10. Calculate the payback period of project X

1. 1.33 years
2. 2.33 years
3. 3.33 years
4. 4.33 years

11. Calculate the crossover rate.

1. 7.17%
2. 7.48%
3. 9.00%
4. 8.75%

12. Imagine that discount is 5%, and the two projects are mutually exclusive, which project shall you choose?

1. Project X
2. Project Y
3. Both
4. None

13. Imagine that discount is 11%, and the two projects are mutually exclusive, which project shall you choose?

1. Project X
2. Project Y
3. Both
4. None