A firm with a 13.5 percent cost of capital is evaluating two…
A firm with a 13.5 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: -$10,000 $3,100 $5,400 $5,300 Project Y: -$5,000 $2,500 $1,900 $2,700 If Projects X and Y are mutually exclusive, which one(s) should the firm adopt?