A firm uses the net present value method to evaluate capital projects. The firm's required rate of return is 10%. The firm is considering two mutually exclusive projects for its manufacturing business. Both projects require an initial outlay of $120,000 and are expected to have a useful life of 4 years. The projected after-tax cash flows associated with these projects are as follows: Year Project X Project Y 1 $ 40,000 $ 10,000 2 40,000 20,000 3 40,000 60,000 4 40,000 80,000 Total $160,000 $170,000 Present value factors are as follows: Year Present Value of $1 at 10% Present Value of Ordinary Annuity of $1 at 10% 1 0.909 0.909 2 0.826 1.736 3 0.751 2.487 4 0.683 3.170 Assuming adequate funds are available, which of the following project options would you recommend that the firm's management undertake? Neither project. Projects X and Y. Project Y only. Project X only