Question: You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Year 0 Year 1 Year2

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):

Year 0 Year 1 Year2 Year 3 Year 4
-51 27 22 18 13
-100 20 39 49 58

a. What are the IRRs of the two projects?

b. If your discount rate is 4.6%, what are the NPVs of the two projects?

c. Why do IRR and NPV rank the two projects differently?

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