Question: 2. Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services,

 2. Capitol Health Plans, Inc. is evaluating two different methods for

2. Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues are not affected by the method chosen. Therefore, the incremental cash flows for the decision are all outflows. Here are the projected flows: Method YearA Method B 0S300,000 1 -S66,000 2-$66,000 3 -$66,000 4-$66,000 5 -$66,000 S120,000 S96,000 S96,000 S96,000 S96,000 S96,000 a. What is alternative's IRR? b. If the cost of capital for both methods is 9 percent, which method should be chosen? Why

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