Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 8%, has estimated its cash flows as shown in the following table:

a.Calculate the NPV of each project, and assess its acceptability. (Round to two decimal places)

NPV of Project A:

Is this acceptable?

NPV of Project B:

Is this acceptable?

b.Calculate the IRR for each project, and assess its acceptability. (Round to two decimal places)

IRR for Project A:

Is this acceptable?

IRR for Project B:

Is this acceptable?

Initial investment (CFO) Year (t Project A Project B $140,000 $103,000 Cash inflows (CFt) $25,000 $55,000 $35,000 $30,000 $50,000 $20,000 $20,000 $45,000 $25,000 $65,000