2. NPV and IRR methods Ford Industries is evaluating two mutually exclusive projects with the following net ca5h flows: Project A ?$2,000 $300 $500 $800 $1,200 Project B ?$2,000 $1,000 $800 $500 $200 Ford?s WACC is 9.1% and both projects have the same risk as the firm?s average project. Calculate each project?s net present value (NPV). Ford?s CFO has instructed managers to use the IRR method when choosing between mutually exclusive projects. If managers choose the project with the highest IRR, how much value will be lost? (Hint: If the project with the highest IRR also has the highest NPV, then no value is lost because the firm selects the project that adds the most value. Otherwise, the difference between the two projects? NPVs is the value lost from u5ing the IRR method instead of the NPV method.) $43.20 $34.60 $22.05 $0.00 $38.87