You are a financial analyst for the Lin-Knicks Company. The director of capital budgeting has asked you to analyze two proposed capital investments. Projects X and Y. Each project has a cost of $10,000 and a 12% cost of capital. The projects' expected net cash flows are asfollows:

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Year Project X Project Y S10,000 10,000 3,500 3,500 3,500 6,500 3,000 3,000