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1 The following table shows the cash flows of two projects from year 0 to year 10. You can copy and paste the table
1 The following table shows the cash flows of two projects from year 0 to year 10. You can copy and paste the table for Excel for easier computation. Project A Project B $ $ Year 0 (600) (800) Year 1 170 280 $ Year 2 160 170 CA $ $ Year 3 180 200 $ $ Year 4 190 200 $ $ Year 5 100 100 $ $ Year 6 60 100 $ Year 7 00 60 100 Year 8 20 20 69 Year 9 20 20 Year $ S 10 200 250 Please complete the following tasks: (a) Solve the IRR of EACH project (1 points) (b) Solve the NPV of EACH project when required return is 10% (1 points) (c) Solve the NPV of EACH project when required return is 20% (1 points) (d) Solve the crossover rate for the two projects (2 points) (e) Explain how to use the crossover rate to choose the better project, assume Project A and Project B are mutually exclusive to each other. (2 points) (f) List the advantages and disadvantages of using IRR to make capital budgeting decisions, especially when compared to using NPV. (5 points)
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