A firm has two $$1,000,$ mutually exclusive investment alternatives with the

following cash inflows. The cost of capital is $6$ percent. Cash Inflow

Year A B

$1$ $$175$ $$1,100$

$2175--$

$3175--$

$4175--$

$5175--$

$6175--$

$7175--$

$8175--$

a$.$ What is the internal rate of return on each investment? Which

investment should the firm make?

b$.$ What is the net present value of each investment? Which investment

should the firm make?

c$.$ If the cash inflows can be reinvested at $8$ percent, which investment

should be made?