QUESTION 55 Consider the following mutually exclusive projects, X and Y, where the firm can only choose one Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respectively Applying NPV technique to determine which investment should the firm choose if the cost of capital is 10 percent? OA. Project X, since it has a higher NPV than Project Y OB. Project Y, since it has a higher NPV than Project X OC. Project X, since it has a lower NPV than Project Y OD. Project Y, since it has a lower NPV than Project X . 2

Consider the following mutually exclusive projects, X and Y, where the firm can only choose ane - Project X costs $600 and has cash llows of $400 in each of the next 2 years. - Project Y also costs 5600 , and generates cash flows of $500 and $275 for the next 2 years, rospectively Applying NPV technique to determine which investment should the fim choose if the cost of capital is 10 percent? A. Project X, since it has a higher NPV than Project Y B. Project Y, since al has a higher NPV than Projed X. C Project X, since it has a lower NPV than Project Y D. Project Y, since it has a lower NPV than Project X