You are asked to evaluate the following two projects for the Norton Corporation. Using the net present value method, profitability index, and IRR approach, which project would you select? Use a discount rate of 10 percent.
Project X (Videotapes of the Weather Report) ($10,000 Investment)
Year 1 CF(Cash Flow)= 5000
Year 2 CF= 3000
Year 3 CF= 4000
Year 4 CF= 3600
Project Y (Slow-Motion Replays of Commercials) ($30,000 investment)
Year 1 CF= 15000
Year 2 CF= 8000
Year 3 CF= 9000
Year 4 CF= 11000