A division of Catamount, Inc. is considering two investment projects, each of which requires an up-front expenditure of $34 million. The projects are independent. Your estimate of the net cash flows for each project (including the initial investment) are as shown:

Year	Project A	Project B
0	-$34,000,000	-$34,000,000
1	7,000,000	22,000,000
2	12,000,000	12,000,000
3	22,000,000	8,000,000

Fill in the table below showing the net present value (NPV) for each project assuming the cost of capital (the discount rate) is 7% or 10%:

Cost of Capital	Project A NPV	Project B NPV
7%
10%

b.What is the internal rate of return (IRR) for each project:

Project A IRR:
Project B IRR:

c. Assume Catamounts cost of capital is 10% and there is no capital rationing (i.e., no limit on total capital spending). Should Catamount accept Project A, Project B or both projects? Why?