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You are choosing between two projects. The cash flows for the…

January 10, 2024

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	25	22	22	13
B	-101	21	39	49	60

1. [6 Marks] What are the IRRs of the two projects? 2. [6 Marks] If your discount rate is 4.6%, what are the NPVs of the two projects? 3. [3 Marks] Why do IRR and NPV rank the two projects differently?

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