Question: Consider the following two projects: Year 0 Cash Project Flow -100 -73 A B Year 1 Year 2 Cash Cash Flow Flow 40 50

Consider the following two projects: Year 0 Cash Project Flow -100 -73 A B Year 1 Year 2 Cash Cash Flow Flow

Consider the following two projects: Year 0 Cash Project Flow -100 -73 A B Year 1 Year 2 Cash Cash Flow Flow 40 50 30 30 Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate .15 .15 a. What is the internal rate of return (IRR) for Project A? (3 MARK b. What is the internal rate of return (IRR) for Project B? (3 MARKS) c. What is the maximum number of IRRs that could exist for Project B? (1 MARK) d. Which project should you accept? (1 MARK)

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