Hello,

I do not know how to answer Problem 14.3. Could someone please help me understand and solve this problem?

I have uploaded a picture for clarification.

Thank You,

Hira

Hcalthplans, Inc., is evaluating two different methods for tracting out for services, and the health outcomes and , the 4.3 Capitol e health services to its members. Both methods are not affected by the method chosen. Therefore cevenues are not affected by the cash flows for the decision are all outflows. Here are the projected flows: Year Method AMethod B 0 ($300,000) ($120,000) (96,000) (96,000) (96,000) (96,000) (96,000) (66,000) (66,000) (66,000) (66,000) (66,000) 4 a. What is each alternative's IRR? b. If the cost of capital for both methods is 9 percent, which method should be chosen? Why