1. Bernies Restaurants is considering two mutually exclusive projects having the cash flow streams shown in the table below.

1. Compute the net present value (NPV) for both projects using a 15% required rate of return.

2. Compute the internal rate of return (IRR) for both projects.

3. Compute the profitability index for both projects.

4. Which project should Bernies business accept and why?

Bernies Restaurants Capital Budgeting Projects
Year	Project A Net Cash Flow	Project B Net Cash Flow
0	-$ 90,000	-$100,000
1	$ 40,000	$ 30,000
2	$ 40,000	$ 50,000
3	$ 40,000	$ 25,000
4	$ 40,000	$ 55,000