The Winston Co. is considering two mutually exclusive projects with the following cash flows:

Project A Project B

Year Cash Flow Cash Flow

0 -$75,000 -$60,000

1 $30,000 $25,000

2 $35,000 $30,000

3 $35,000 $25,000

B-1 what is the IRR of project A?

B-2 What is the IRR of project B?

B-3 Based on the IRR rule, which project should be accepted and why?

B-4 At what required rate of return will the company be indifferent between the two projects?

B-5 If Winston company has a required rate of return of 10%, which project (if any) should it accept and why?

B-6 If the company has a required rate of return of 15%, which project (if any) should it accept and why?