Consider two mutually exclusive R&D projects that ADM is considering. Assume the discount rate for ADM is 8%.

Project A: Server CPU .13 micron processing project By shrinking the die size to .13 micron, ADM will be able to offer server CPU chips with lower power consumption and heat generation, meaning faster CPUs.

Project B: New telecom chip project Entry into this industrywill require introduction of a new chip for cell phones. The know-how willrequire a large amount of up-front capital, but success of the project will lead to large cash flows later on.

Year	Project A	Project B
0	$	805,000		$	1,020,000
1		360,000			263,000
2		385,000			384,000
3		265,000			380,000
4		190,000			428,000
5		140,000			515,000

Complete the following table? Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places.

Project A Project B

NPV ? $ NPV ?$

IRR ? % IRR ? %

PI ? PI ?

What is the incremental IRR of investing in the larger project?

Incremental IRR ? %