Question: CAA, Inc. are considering two projects with the cash flows presented in the following table. The required return for both projects is 15 percent.

CAA, Inc. are considering two projects with the cash flows presented in the following table. The required

CAA, Inc. are considering two projects with the cash flows presented in the following table. The required return for both projects is 15 percent. (a) If the two projects are independent, should you accept both projects or accept only one of them? Please use both NPV and IRR method to explain your choice. (b) If the two projects are mutually exclusive, which method should you use and which project should you accept? Why? year project A project b 0 600100 -100050 1 307100 77050 2 390100 76050 3 180100 80050

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