11-12 IRR AND NPV A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 Project S -$1,000 Project L -$1,000 1 2 3 $870 $250 $25 $0 $250 $400 4 $25 $845 The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) 11-6 NPV Your division is considering two projects with the following cash flows (in millions): 0 Project A -$25 Project B -$20 1 $5 $10 2 $10 $9 3 $17 $6 a. What are the projects' NPVs assuming the WACC is 5%? 10%? 15%? b. What are the projects' IRRs at each of these WACCs? c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? What if the WACC was 10%? 15%? (Hint: The crossover rate is 7.81%.)