Question: b) Consider two mutually exclusive projects with the following cash flows: Project C/FO C/F1 C/F2 C/F3 C/F6 C/F4 C/F5 $18,000 $20,000 0 A $(41,215) $12,500

b) Consider two mutually exclusive projects with the following cash flows:

b) Consider two mutually exclusive projects with the following cash flows: Project C/FO C/F1 C/F2 C/F3 C/F6 C/F4 C/F5 $18,000 $20,000 0 A $(41,215) $12,500 $14,000 $16,500 B $(46,775) $15,000 $15,000 $15,000 $15,000 $15,000 ? $15,000 ? B-A ? ? ? ? ? i. You are considering using the IRR approach to decide between the two mutually exclusive projects A & B. Complete the table above. How many potential IRRs could there be for (B-A)? And why. (2 marks) ii. If the discount rate for project A and B is 16%, and 15%, then what is the NPV for project A and B? Which project will you choose? And why. (2 marks)

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