XYZ Inc. is considering two projects with the following cash flows:

• Initial outlay for both projects: $5,000
• Project X: $2,000 annually for 3 years
• Project Y: $1,500 annually for 5 years
• Discount rate: 10%

Requirements:

1. Compute the NPV for both projects.
2. Determine the IRR for each project.
3. Calculate the payback period for both projects.
4. Make a recommendation on which project to undertake.