Question: You are considering the following two mutually exclusive projects. year Project A Project B 0 -$36,000 -$36,000 1 21,500 13,690 2 13,500 11,500 3 13,500

You are considering the following two mutually exclusive projects.

year

Project A

Project B

0

-$36,000

-$36,000

1

21,500

13,690

2

13,500

11,500

3

13,500

25,300

1) What is the internal rate of return (IRR) of projects A and B?

2) What is the NPV of projects A and B if the required rate of return is 9%? Which project we should choose?

3) What is the NPV of projects A and B if the required rate of return is 12%? Which project we should choose?

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