The correct answer is that Project X will have both a higher present and a higher future value than Project Y, as it is receiving higher cash flows in earlier years.
As we can see that in Project X, higher cash flows are there in earlier year whereas in project Y, the cash flow are lower in earlier years, and according to the concept of time value of money, the amount received in earlier years will be having more value than the same amount received in later years.
According to concept of time value of money, the money today we have is worth more than the same amount of money we will be having in future date. Due to many factors such as inflation and exchange rate the value of money fluctuates over time, hence cause reduction in its value.
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