Question: Chapter 5 Problemi 4 (10%): Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive,

Chapter 5 Problemi 4 (10%): Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates other methods. 8.00% WACC: Year CFx CFy $1,100 -$2,750 $450 $625 $500 $725 $100 $800 $100 $1,400 What are the NPV's of each of the projects? What are the IRR's of each? a. b. What is the payback period and discounted payback period? 4

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