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

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

Project Year 0 Year 1 Year 2 Year 3 Year 4

A -$50 $23 $19 $18 $17

B -$100 $19 $40 $51 $60

A. What are the IRRs of the two projects?

B. If your discount rate is 5.3%, what are the NPVs of the two projects?

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

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