The cash flows for two mutually exclusive projects are as follows:

C0 C1 C2 C3

Project A -30,000 14,000 14,000 14,000

Project B -50,000 24,000 24,000 24,000

REQUIRED: (7 marks)

i) Calculate NPV for each project if the required rate of return is 12%. (3 marks)

ii) Calculate the Internal Rate of Return (IRR) for each project. (3 marks)

iii) Which project should the company invest in? Why? (1 mark)