1..The following are the cash flows for two mutually exclusive projects under consideration. The projects are considered average risk projects. The companys WACC is 16 percent. Year 0 Year 1 Year 2 Year 3 Year 4 Cash flows of A (12,000) 6,000 5,000 4,000 3,000 Cash flows of B (11,500) 3,000 6,000 6,000 3,750

a. Determine the IRR values for the two projects. b. Draw a figure of NPV profiles. (Figures dont have to be exact, use discount rates of 10%, 15%, 20%, and 25%. Consistency in the graph expected.) c. Determine the exact cross-over rate

2.Use the following cash flows to determine the IRR. Make a selection statement.

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

-52,000 10,000 30,000 30,000 25,000 20,000