Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%.

	0		1		2		3		4
Project A	-1,200		600		400		230		300
Project B	-1,200		410		330		210		740

What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places.

%

What is the significance of this IRR?

Review the graphs below. Select the graph that correctly represents the correct NPV profile for Projects A and B by using the following drop down menu.

-Select-A, B, C, D

NPV Profiles A NPV Profiles B NPV Profiles C #NPV (5) INPV (5) INPV (5) 600 600 + 600+ 500+ 5001 500+ 400+ 300+ 4007 3001 400+ 300+ 2001 100 200 2007 100 100+ ++ ++ 5 10 16 20 25 30 5 10 15 20 25 30 5 10 16. 20 25 30 -100 -100 -100 -200 Cost of Capital -200 Cost of Capital -200 Cost of Capital % -300 + -4001 -300 -4001 -300 -4001 NPV Profiles D #NPV (5) 6001 500+ 400+ 300+ 2001 100+ 5 at 20 25 30 Cost of Capital (%) -100 -2001 -3001 -400