2. The following two projects are mutually exclusive meaning we can only choose one. The cost of capital is 8% and we must do the calculation for the NPV and the IRR for both. If they conflict (and you know they will LOL), we must calculate the IRR of the delta project and base our decision on that indicator!

Stock	ABC	XYZ	DProject cash Flow
I0	($50,000)	($50,000)	0
Year 1	0	0	0
Year 2	$25,000	0	$25,000
Year 3	$25,000	0	$25,000
Year 4	$25,000	$82,000	-$57,000
NPV	$9,655.02	$10,272.45	-------
IRR	14.71%	13.17%	-------
IRRDProj.			9.06%

Select project XYZ using the crossover rate of 9.06% and the cost of capital of 8%