a) You are evaluating two mutually exclusive projects, project P and project Q. The projects actually have the following IRR (internal rate of return) and NPV (net present value) calculated at the firms cost of capital.

Project P IRR18% NPV: $940.00

Project Q IRR 21% NPV: $824.00

i)Within what range of values does the firms cost of capital lie?

ii)Based on the NPV technique, which of these mutually exclusive projects should be accepted?

iii) Based on the IRR technique, which of these mutually exclusive projects should be accepted?

iii)Which of the two proposed capital budgeting techniques(IRR or NPV) will you apply to choose between P or Q? Explain why.