In your role as a senior financial analyst for Capital Financial, you are told the remaining budget to invest in a cost-saving project is $2.5 million. You have identified two opportunities that warrant in-depth analysis, and you will consider the cash flow from the following two projects (Project A and Project B) in your report.

• Year 0
• Project A: -750,000
• Project B: -2,400,000
• Year 1
• Project A: 360,000
• Project B: 1,700,000
• Year 2
• Project A: 420,000
• Project B: 800,000
• Year 3
• Project A: 340,000
• Project B: 850,000

After completing your analysis, write a formal business letter to the CEO and Board of Directors explaining your findings. Be sure to address the following:

1. Calculate and include the IRR and NPV for the cash flows of both projects.
2. Explain which project has the highest IRR and why this is important.
3. Describe which project has the highest NPV and whether it is consistent with the IRR rule.
4. Summarize the analysis of both projects, focusing on the pros and cons of each project, include your calculations for support in the business letter.
5. Develop a persuasive argument using the calculations and data to support your recommendation for the project that should be pursued by the company.