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Alpha Corp. is evaluating two investment opportunities. Both projects require an initial investment of USD...

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Accounting

Alpha Corp. is evaluating two investment opportunities. Both projects require an initial investment of USD 100,000. The cash flows are as follows:

Year

Cash Flows (Project X)

Cash Flows (Project Y)

Initial Investment

(100,000)

(100,000)

1

30,000

20,000

2

40,000

30,000

3

50,000

50,000

4

10,000

40,000

Requirements: a. Compute the payback period for each project. b. Calculate the NPV of each project if the discount rate is 10%. c. Determine the Internal Rate of Return (IRR) for both projects and decide which project should be selected based on IRR.

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