1. answer the following question using the timeline of cashflows below:

Time 0 1 2 3 4

Cash Flow -5,000 3,000 2,000 1,000 3,000

c. Compute the IRR and then tell me if you would accept the project if the required rate of return is 20 percent and why.

2c. using the project cash flows for Project A and B:

Project Cash flows:

A B

-10,000 -10,000

10,000 1,000

1,000 1,000

1,000 12,000

Identify which project you would choose using NPV for these discount rates: 0%, 8%, 12%

2d. Using the project cash flows for Project A and B:

A B

-10,000 -10,000

10,000 1,000

1,000 1,000

1,000 12,000

Write a brief explanation of why your NPV decision changes and at what rate that decision begins to conflict with the IRR choice?