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Project evaluation You are a financial analyst for the Edelman Engineering pvt Ltd. The director of...

Project evaluation
You are a financial analyst for the Edelman Engineering pvt Ltd. The director of capital budgeting has asked you to analyse two proposed capital investments, Projects X and Y. The cost of capital for each project is 13%.
The projects’ initial cost and expected net cash flows are as follows. The two projects are mutually exclusive projects.
Year
CASH FLOW (X)
CASH FLOW (Y)
0
-$245 000
-$53 000
1
34 000
31 900
2
49 000
21 800
3
51 000
17 300
4
325 000
16 200
Required
1. If you apply the pay back criterion, which project will you choose? Why? ​​
2. If you apply the NPV criterion, which project will you choose? Why? ​​
3. If you apply the IRR criterion, which project will you choose? Why? ​​
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