11. NPV versus IRR Consider the following cash flows on two mutually exclusive projects of 14 percent. Year 0 672C 1 Deepwater Fishing -$875,000 330,000 480,000 440,000 New Submarine Ride -$1,650,000 890,000 730,000 590,000 As a financial analyst for the company, you are asked the following questions: a. If your decision rule is to accept the project with the greater IRR, which project should you choose? b. Because you are fully aware of the IRR rule's scale problem, you calculate the incre mental IRR for the cash flows. Based on your computation, which project should you choose? c. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it consistent with the incremental IRR rule?

rule? 11. NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent. As a financial analyst for the company, you are asked the following questions: a. If your decision rule is to accept the project with the greater IRR, which project should you choose? b. Because you are fully aware of the IRR rule's scale problem, you calculate the incre mental IRR for the cash flows. Based on your computation, which project should you choose? c. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it consistent with the incremental IRR rule