Consider the following cash flows on two mutually exclusive projects for

Tomatina Recreation SA$.$ Both projects require an annual return of $15$ per cent.

Year

Deepwater

Fishing $()$

New Submarine

Ride $()$

$0600,0001,800,000$

$1270,0001,000,000$

$2350,000700,000$

$3300,000900,000$

As a financial analyst for Tomatina, you are asked the following questions:

$($a$)$ Calculate the IRR. Which project should you choose?

$($b$)$ Compute the NPV for both projects. Which project should you choose?