Assume that you are the chief financial officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capitalinvestment's Project X and Project Y. Each project requires a net investment outlay of $10,000, and the cost of capital for each project is 12 percent. The project's expected net cash flows are:Year Project X Project Y0 ($10,000) ($10,000)1 6,500 3,0002 3,000 3,0003 3,000 3,0004 1,000 3,000
a. Calculate each project's payback period, net present value (NPV),and internal rate of return (IRR).b. Which project (or projects) is financially acceptable? Explain your answer.