Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm€™s warehouse capacity. The relevant cash flows for the projects are shown in the following table. The firm€™s cost of capital is 15%.

a. Calculate the IRR to the nearest whole percent for each of the projects.
b. Assess the acceptability of each project on the basis of the IRRs found in part a.
c. Which project, on this basis, ispreferred?

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Project X Projcct Y Initial investment (CFo) $500,000 325,000 Year (t) Cash inflows (CF) $100,000 $140,000 120,000 120,000 95,000 70,000 250,000 50,000 150,000 190,000 4 5