Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to itsmembers. Both methods involve contracting out for services, and the health outcomes and revenues arenot affected by the method chosen. The cost of capital is 9%.The incremental cash flows for the decision are all outflows. Here are the projected flows:

Year Method A Method B

0 -$300,000 -$120,000

1 -$66,000 -$96,000

2 -$66,000 -$96,000

3 -$66,000 -$96,000

4 -$66,000 -$96,000

5 -$66,000 -$96,000

What is the IRR for Method A?

What is the IRR for Method B?

Note:Think about this one carefully.Enter positive results as xx.x%Enter negative results as -xx.x%.Enter null results as NA.

What is the NPV for Method A?

What is the NPV for Method B?

Note: Enter positive results as $xxx,xxx.Enter negative results as ($xxx,xxx)

Holding any qualitative factors aside, which method should be chosen based on this analysis?

Note:Enter answer as A or B