1.Consider the following two mutually exclusive projects: A and B. Both projects require an annual rate of return of 15%. The cash flows for the two projects are as below:

Year Project A Project B

0 -600,000 -1,800,000

1 270,000 1,000,000

2 350,000 700,000

3 300,000 900,000

1)Calculate the IRR (using the Excel function, =IRR) for each project. Based on the IRR, which one should be your choice?

2)Calculate the NPV for each project, using your calculator (please also use the Excel function to double check your result). Based on the NPV rule, which one should you recommend?

3)Is there a conflict between the two rules? If yes, which project should be taken?