Question 2 [15] - NO Excel and please Show calculations

Total Ltd is evaluating the feasibility of two possible projects. It cannot do both they are mutually exclusive. The cash flows are:

Point in time Project A Project B

0. -420 000 -100 000

1 150 000 75 000

2 150 000 75 000

3 150 000 0

4 150 000 0

The company's required rate of return is 12%. Assume unlimited funds. These are the only cash flows associated with the projects.

2.1. Calculate the internal rate of return (IRR) for each project. (5)

2.2. Calculate the net present value (NPV) for each project. (5)

2.3. Compare and explain the results in (2.1) and (2.2) and indicate which project the company should undertake and why. (5)