Question: A company is analyzing two mutually exclusive projects, A and B, whose cash flows are shown below: Years 0 r = 10% 1 2 3

A company is analyzing two mutually exclusive projects, A and B, whose cash flows are shown below:

Years 0 r = 10% 1 2 3

| | | |

A	-3,100	1,800	1750	750
B	-3,100	700	0	3,500

The company's cost of capital is 10 percent, and it can get an unlimited amount of capital at that cost. What is the IRR of the better project, i.e., the project which the company should choose if it wants to maximize its stock price?

Project ?

IRR ?

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