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Assume you are the Chief Financial Officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capital investments - Project X & Project Y. Each project has a net investment outlay of $10,000 and the opportunity cost for each project is 12%. You have calculated each project's payback, net present value & internal rate of return as follows:

         Project X                  Project Y

Payback     5.25 years        3.01 years

NPV           -$101       $567

IRR            11.42%                    15.6%

Which project is financially acceptable?

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