Question: Suppose you are faced with choosing between 2 mutually exclusive investments X and Y that have the following Cash flows. End of year Project X

Suppose you are faced with choosing between 2 mutually exclusive investments X and Y that have the following Cash flows.

End of year Project X Project Y

Cash flows Cash flows

Sh. 000 Sh. 000

0 - 1000 - 1000

1 0 2000

2 0 0

3 3,375 0

If the required rate of return is 10% we can summarize our investment appraisal results as follows

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