8 The table below provides the initial cash outflows and net cash flows of Project AA...

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8 The table below provides the initial cash outflows and net cash flows of Project AA and Project BB. Initial outlay ($) Year Project AA 0 1 (4,000,000) Project BB (4,000,000) 0 Net cash flow each period ($) 2 3 2,800,000 2,800,000 2,800,000 2,800,000 0 8,000,000 10,000,000 (a) Calculate the net present value of each project, assuming a 15% discount rate. (b) What is the internal rate of return for each project? (c) Compare and explain the conflicting rankings of the NPVS and IRRS obtained in parts (a) and (b). (d) If 15% is the required rate of return, and these projects are independent, what decision should be made? (e) If 15% is the required rate of return, and the projects are mutually exclusive, what decision should be made? (f) What is the crossover rate that will make you indifferent towards both projects? 8 The table below provides the initial cash outflows and net cash flows of Project AA and Project BB. Initial outlay ($) Year Project AA 0 1 (4,000,000) Project BB (4,000,000) 0 Net cash flow each period ($) 2 3 2,800,000 2,800,000 2,800,000 2,800,000 0 8,000,000 10,000,000 (a) Calculate the net present value of each project, assuming a 15% discount rate. (b) What is the internal rate of return for each project? (c) Compare and explain the conflicting rankings of the NPVS and IRRS obtained in parts (a) and (b). (d) If 15% is the required rate of return, and these projects are independent, what decision should be made? (e) If 15% is the required rate of return, and the projects are mutually exclusive, what decision should be made? (f) What is the crossover rate that will make you indifferent towards both projects?