Year Project X Project Y Cummulative Cashflow X

0 -10000 -10000
1 6350 3600 -3650
2 2988 3700 -662
3 3145 3500 2483
4 945 3500 3428
Payback period 2.210493 2.771428571
NPV 890.7716 879.447203
IRR 18% 16%
Sum of PV 10890.77 10879.4472
PI 1.089077 1.08794472

What project to invest in?

As both projects X and Y have NPV>0, it is profitable for Hittle Company to invest in both projects. However, if due to budget c
has to be made to invest between project X and Y as NPV of Project X> NPV of Project Y therefore, it is recommended for the
However, if the company wants a smaller payback period and doesn’t want to tie its investment in a project for long, that has
the Hittle Company should invest in Project X.
 Cummulative Cashflow Y cost of capital 0.12

-6400
-2700
800
4300

ojects. However, if due to budget constraints a choice

refore, it is recommended for the company to invest in Project X.
ment in a project for long, that has payback period of Project X< payback period of Project Y