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4. Consider two projects, A and B. Year Project A Project B 0 -30,000 -28,000 1 27,000 15,000 2 10,000 12,000 3 12,000 46,000

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4. Consider two projects, A and B. Year Project A Project B 0 -30,000 -28,000 1 27,000 15,000 2 10,000 12,000 3 12,000 46,000 a. Your boss has told you to evaluate these projects using either the payback period or the IRR. What are the relative strengths and weaknesses of those methods? Do they apply in this particular case? b. Use the better method to determine which is the better project. (The cut-off for the payback period is 2 years, and the IRR must be above 10%.) Be sure to indicate how you decided which method is better.

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