Question: Need help understanding finance question. Part (B) is most important (a) A project has 6 million cashflow each year for 5years, payback period of 4

Need help understanding finance question. Part (B) is most important

(a) A project has 6 million cashflow each year for 5years, payback period of 4 years and rate of return 11%. Solve for the project's NPV, by showing all relevant workings. Verify your answer with an appropriate Excel function. Indicate whether you should proceed with the project.

(b) A company is evaluating two mutually exclusive projects A and B, and both have conventional cashflows (i.e. all inflows after the initial outflow). Project A has an IRR of 14% and the NPV profiles of Project A and Project B cross-over at 10%.

Illustrate, using a graph or any other means, the range of values of cost of capital, when the NPV rule and IRR rule will not lead to the same decision.

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