1.

You are considering two mutually exclusive investments. The projects expected net cash flows are as follows:

Expected Net Cash Flows

Year	Project X	Project Z
0	$(45,000)	$(50,000)
1	(20,000)	15,000
2	11,000	15,000
3	20,000	15,000
4	30,000	15,000
5	45,000	15,000

1. Construct NPV profiles for Projects X and Z (table AND line graph).

2. Calculate each projects IRR.

3. If the required rate of return for each project is 9 percent, which project should you select? If the required rate of return is 12 percent, what would be the proper choice? If the required rate of return is 15 percent, what would be the proper choice?

4. At what rate do the NPV profiles of the two projects cross?

a) Construct NPV profiles for Projects X and Z (complete the following ta Discount Rate NPV X Profile NPV Z Profile Calculate each project's IRR Project X IRR Project Z IRR 2) Which project would you choose for the following rates? d) At what rate do the NPV profiles of the two projects cross? Year Difference in cash flows