Assume you are a finance manager of the company. Which project you should Choose based on NPV? Would your decision change if payback method was used? Or Discounted Pay back period? Which method you think is the best to find out the solution and why? Why you are not choosing the other two methods? Total 15

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2. Projects X and Y have the following expected net cash flows: (7) Project X Year Cash Flow 012345 -$800,000 Project Y Cash Flow -$600,000 300,000 200,000 300,000 200,000 300,000 200,000 250,000 200,000 150,000 Both the projects are of the same company, Becon Pharma. Cost of capital is 14% 2. Projects X and Y have the following expected net cash flows: (7) Project X Year Cash Flow 012345 -$800,000 Project Y Cash Flow -$600,000 300,000 200,000 300,000 200,000 300,000 200,000 250,000 200,000 150,000 Both the projects are of the same company, Becon Pharma. Cost of capital is 14%