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2. (1 pt) Consider the following two mutually exclusive projects: Cash Flows ($ millions) ProjectC 0 C 1 C 2 C 3 A-200+110+1200 B-20000+250 A.

2. (1 pt)Consider the following two mutually exclusive projects:

Cash Flows ($ millions)

ProjectC₀C₁C₂C₃

A-200+110+1200

B-20000+250

A.Calculate IRR for A, IRR for B, and the cross-over rate of the two projects.

B.What is the range of the discount rate (to calculate NPV) that A should be chosen; and what is the range of the discount rate that B should be chosen? (Describe how you found this answer)

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