Question: 1. Suppose, your company is considering two mutually exclusive projects, X and Y whose costs and cash flows are shown below. Assume that the projects

1. Suppose, your company is considering two mutually exclusive projects, X and Y whose costs and cash flows are shown below. Assume that the projects are equally risky, and their cost of capital is 12%.

Year	Project X	Project Y
0	$(5,000)	$(5,000)
1	1,000	4,500
2	1,500	1,500
3	2,000	1,000
4	4,000	500

What are the net present value of both Project X (NPV_X) and Project Y (NPV_Y)? If projects are mutually exclusive, which project do you accept?

Question 8 options:

	NPV_X = $1054; NPV_Y =$1240; Reject both projects.
	NPV_X = $1140; NPV_Y =$1243; Accept both Project X and Project Y.
	NPV_X = $1054; NPV_Y =$1243; Accept Project Y.
	NPV_X = $1243; NPV_Y =$1054; Accept Project X.

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