Q4.23. The prevailing interest rate is 5% over the first year and 10% over the second year. That is, over two years, your compounded interest rate is (1+5%) (1+10%)-1= 15.5%. Your project costs $1,000 and will pay $600 in the first year and $500 in the second year. What does the IRR rule recommend? What does the NPV rule recommend?