Choosing Between two Mutually Exclusive Projects Question 2: A company can cither invest in project A, project B, or neither (the projects are mutually exclusive and the company has no other investment options). Project A requires an initial investment of $1,000,000 and provides cash flows of $300,000 a year for six years. The project will also return $200,000 in capital back to the company in year six. Project B requires a $375,000 investment and will have cash flows of $200,000 a year for 4 years. The firm's hurdle rate for these projects is 8%. a) Which project, if any, should be chosen? b) Is the IRR of project A over 8%, below 8%, or exactly 8% c) Is the IRR of project B over 8%, below 8%, or exactly 8%? d) Which project has the higher IRR? How do you know