AgEcon Coop is considering two mutually exclusive projects, i.e., they can only pick one. The schedule of cash flows is given below:

YEAR	Cash flow (X)	Cash flow (Y)
0	-$365,000	-$60,000
1	45,000	30,000
2	35,000	30,000
3	100,000	30,000
4	360,000	30,000

Based on the information in the table answer the questions that follow.

1. Calculate the payback period for each project.
2. Calculate the NPV for each project considering a 7% and a 10% interest rate. See if you can use the tables for this part and show your work.
3. Calculate the PI for each project at a 7% and 10% rate. Show your work.
4. Complete the following table summarizing your answers.

	Project X	Project Y
Payback Period
NPV @ 7%
PI @ 7%
NPV @ 10%
PI @ 10%

Remember that AgEcon Coop can support only one project.

• If you apply the NPV criterion, which project will you choose? Explain.
• Based on the PI criterion, which project will you choose? Explain.
• Do you notice any inconsistencies in ranking the projects using the PI? Explain.
• If the desired payback period is three (3) years, which project will you choose? What if the desired payback period is four (4) years? Explain.