Question: Consider the following two mutually exclusive projects: Cash Flows ($) Project C 0 C 1 C 2 C 3 A -$100 +$60 +$60 +$60 B

Consider the following two mutually exclusive projects:

	Cash Flows ($)

Project	C₀	C₁	C₂	C₃
A	-$100	+$60	+$60	+$60
B	-$100	----	----	+$208.35

Calculate the NPV of each project for a discount rate of 14%.

What is approximately the IRR for each project individually?

Use the IRR cross-over method to determine which of the projects you should accept (describe the correct decision rule describing when you pick A versus B based on what discount rate).

(DO NOT USE EXCEL)

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