Consider the following two projects: Project

a) Given a discount rate of 5%, what is the NPV for project A and B, respectively? Which project has a higher NPV? b) Given a discount rate of 10%, what is the NPV for project A and B, respectively? Which project has a higher NPV? c) What is the IRR for project A and B, respectively? Which project has a higher IRR? d) At which discount rate these two projects have the same NPV? e) Based on your answer a) to c), what can you say about selecting mutually exclusive projects based on the ranking of projects IRRs?

\begin{tabular}{lcccc} \hline Project & Year0CashFlow & Year1CashFlow & Year2CashFlow & Year3CashFlow \\ \hline A & -25 & 5 & 10 & 17 \\ \hline B & -20 & 10 & 9 & 6 \\ \hline \end{tabular}