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

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

LOADING...

.

a. What are the IRRs of the two projects?

b. If your discount rate is

5.2%,

what are the

NPVs

of the two projects?

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

Project Year 0 Year 1 Year 2 Year 3 Year 4 A -51 27 20 19 13 B -99 19 39 51 61

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