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Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Time X Y 0 -$2,000 -$2,000

  1. Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:
Time X Y
0 -$2,000 -$2,000
1 200 2,000
2 600 200
3 800 100
4 1,400 75

What is the payback period for Project A and B? Which would be chosen and why?

And If the required rate of return on these projects is 10 percent, what are the NPV for Project A and B? Which would be chosen and why?

Also, Calculate the profitability index for each project and Find the IRR of both projects.

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