Montana Company is evaluating two different capital investments, Project X and Y. Either X or Y would cost

$210,000, and the company cannot afford to do both.

The company expects that Project X would provide net cash inflows of $62,000 per year for 5 years.

For Project Y, the net cash inflows are expected to be as follows:

Year 1

$ 44,000

Year 2

48,000

Year 3

60.000

Year 4

76.000

Year 5

80.000

Total

$ 308.000

Montana's cost of capital is 12%.

Required:

1) Calculate the present value for Project X and for Project Y.

2) Which of the two projects should Montana implement?