Question: Consider two mutually exclusive projects Project X and Project Y with identical initial outlays of RM90,000 and depreciable lives of 5 years. Project X is

Consider two mutually exclusive projects Project X and Project Y with identical initial outlays of RM90,000 and depreciable lives of 5 years. Project X is expected to produce free cash flows of RM32,787 each year. Project Y is expected to generate a single after-tax net cash flow of RM223,880 in year 5. The cost of capital is 15 percent.

Compute the payback period for each project. (4 marks)

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