The cash flow for two (2) projects is given below:

Year Project X Project Y

0 -50 000 -80 000

1 25 000 15 000

2 10 000 20 000

3 10 000 25 000

4 5 000 10 000

5 15 000 10 000

6 10 000 25 000

a. Calculate the Payback period for each of the above projects, Net present value for both projects assuming discount factor 10% (ie cost of capital 10%), profitability index for project X and Y, ARR for both projects and State which project should be accepted using the NPV method and why.