Consider two mutually exclusive projects A and B:

	Cash Flows (dollars)
Project	C0	C1	C2	NPV at 12%
A	35,500	25,400	25,400	+$7,427
B	55,500	38,500	38,500	+9,567

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

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

multiple choice 1

• Project A

• Project B Incorrect

c. Which project is really best?

multiple choice 2

• Project A

• Project B Correct