Question:
I am deciding among two mutually exclusive projects. The two projects have the following cash flows:
Project X
Year 0 -50,000
Year 1 10,000
Year 2 15,000
Year 3 40,000
Year 4 20,000
Project Y
Year 0 -30,000
Year 1 6,000
Year 2 12,000
Year 3 18,000
Year 4 12,000
The company's cost of capital is 10% (WACC = 10%). What is the net present value (NPV) of the project with the highest internal rate of return (IRR)?