2) Given the following cash flows for two mutually exclusive projects (S and L), Answer each of the following questions. To receive full credit you must show your work and clearly label your answers.

Time 0 1 2 3 4

Project S -1,000 500 400 300 100

Project L -1,000 100 300 400 600

1. Calculate the IRR for both projects.
2. Calculate the NPV for both projects using 0, 5, 10 and 15 percent discount rates
3. Draw and label the complete NPV profiles with both projects on a single graph, including the y-axis intercept values, the x-axis intercept values, and the crossover rate
4. Indicate how a conflict can occur between the IRR and NPV decision criteria and show the area of conflict on the graph