Question: The following table contains projected cash flows for two mutually exclusive projects. Use the information for questions Part A-Part B. Year Project A Project B

The following table contains projected cash flows for two mutually exclusive projects. Use the information for questions Part A-Part B.
Year Project A Project B
0 -55000 -55000
1 10000 7500
2 9000 7500
3 8000 7500
4 8000 7500
5 7500 8000
6 7500 9000
7 7500 9000
8 7500 10000
Part A. Calculate NPVs for both project and for various interest rates.
Annual Interest Rates NPVA NPVB Which Project is preferred
4.22%
3.59%
2.51%
Part B. Calculate IRRs for both project.
IRR(A) IRR(B) Which project is preferred if the required rate is 5%

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