Consider the following two mutually exclusive projects:

• Project A with an initial cost of $1000 and a return of $505 per year for 3 years with no salvage value.
• Project B with an initial cost of $11000 and a return of $5000 per year for 3 years with no salvage value

The minimum rate of return is 10%.

1. Which is the preferred project using NPV?
2. Which is the preferred project using IRR?
3. Discuss your evaluations if the two projects are independent.