Question: Dax Systems is considering a project that has the following cash flows for Project X and Y. If these projects are dependent and the cost
Dax Systems is considering a project that has the following cash flows for Project X and Y. If these projects are dependent and the cost of capital is 10%, which project (s) should be accepted?
| Cost of Capital = 10% | ||
| Year | Project X | Project Y |
| 0 | -$1,000 | -$2,000 |
| 1 | $500 | $1,400 |
| 2 | $500 | $800 |
| 3 | $500 | $400 |
| Project X only | ||
| Project Y only | ||
| Project X and Y | ||
| None of them | ||
| Cannot be determined because modified IRR is not provided. |
Please help/explain. Thank you
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