A firm with a 12.5 percent cost of capital is evaluating two…
A firm with a 12.5 percent cost of capital is evaluating two projects for this year’s capital budget. The projects’ expected after-tax cash flows are as follows: Year: 0 1 2 3 Project X: -$12,000 $5,400 $4,600 $4,000 Project Y: -$11,000 $5,700 $5,700 $5,300 If Projects X and Y are mutually exclusive, which one(s) should the firm adopt?