Question: Consider projects A and B: Cash Flows (dollars) Project C 0 C 1 C 2 NPV at 12% A40,000 29,000 29,000 +$9,011 B60,000 43,000 43,000

Consider projects A and B:

Cash Flows (dollars)

ProjectC₀C₁C₂NPV at 12%

A40,000 29,000 29,000 +$9,011

B60,000 43,000 43,000 +12,672

a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Project IRR A % B %

b. Which project does the IRR rule suggest is best? Project A Project B

c. Which project is really best? Project A Project B

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