1. You are analyzing the following two mutually exclusive projects and have developed the following information. Please calculate the IRRs for the two projects and the crossover rate. Which project should you accept if the cost of capital is 5%, and which project should you accept if the cost of capital is 10%?

Year Project A Cash Flow Project B Cash Flow 0 -$84,500 -$76,900

1 $29,000 $25,000

2 $40,000 $35,000

3 $27,000 $26,000

IRR A: ___________

IRR B: ___________

Crossover Rate: ____________

If WACC=5%, accept _______

If WACC=10%, accept _______