You are a financial analyst for the Hittle Company. The director of capital budgeting has asked you to analyze 2 proposed capital investments, Projects X and Y. Each project has a cost of $10,000 and the cost of capital for each is 12%. The projects expected net cash flows are as follows:

Year	Project X	Project Y
0	$-10,000	$-10,000
1	$6500	$-3,500
2	$3000	$-3,500
3	$3000	$-3,500
4	$1000	$-3,500

a. Calculate each project's payback period, NPV, IRR, MIRR and PI?

b. Which project of projects should be accepted if they are independent?

c. Which project should be accepted if they are mutually exclusive?

d. How might a change in the cost of capital produce a conflict between the NPV and IRR rankings of these two projects? Would this conflict exist if r were 5% (hint: plot the NPV profiles).

e. Why does this conflict exist?