10% 1] Determining NPV Cost of capital 10% Year End cash flows Year Project A Project B -$42,000 -$45,000 14,000 28,000 14,000 12,000 14,000 10,000 14,000 10,000 14,000 10,000 NPV $11,071.01 $10,924.40 Better Project? Project A Determining IRR Cost of capital Year End cash flows Year Project A 0 -$42,000 14,000 2 14,000 14,000 4 14,000 14,000 IRR 19.9% Better Project? 3 Project B -$45,000 28,000 12,000 10,000 10,000 10,000 21.7% Project B Sometimes NPV and IRR techniques select different projects. Which project would you choose and why