You have two projects to consider. Both have 4-years of cash flows and a 4% discount rate is appropriate for both projects. The cash flows for project X have a present value of $362.99.

	Present Value @ 4%	End of Year 1	End of Year 2	End of Year 3	End of Year 4
Project X	362.99	100	100	100	100
Project Y		-100	-100	-100	-100

Which of the following is correct?

1. You would accept project X if the initial outlay is less than $362.99.
2. You would accept project Y if you are paid more than $362.99 at Year 0.
3. Both (a) and (b) are true.
4. Neither (a) nor (b) is true.