A firm is considering two projects X and Y. The initial outlay for each project is as follows:

Project X $100 000.00

Project Y $160 000.00

The firms required rate of return is 14%. The after tax cash flow for the two projects are:

Year Project X Project Y

$ $

1 50 000 30 000

2 20 000 40 000

3 10 000 50 000

4 10 000 20 000

5 30 000 20 000

6 20 000 50 000

a. Calculate for each project: payback period, net present value, profitability index and the IRR