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Calculate the NPV and IRR for the cash flows given below, using a required return of 11.75%. Which project is the better choice? Discuss whether
| Calculate the NPV and IRR for the cash flows given below, using a required return of 11.75%. Which project is the better choice? Discuss whether the IRR is reliable in this situation. If a project has two IRRs calculate these. | ||||||||
| Year | Project A | Project B | ||||||
| 0 | $ (350,000) | $ (400,000) | ||||||
| 1 | $ 105,000 | $ 110,000 | ||||||
| 2 | $ 105,000 | $ 110,000 | ||||||
| 3 | $ 105,000 | $ 110,000 | ||||||
| 4 | $ 105,000 | $ 110,000 | ||||||
| 5 | $ 80,000 | $ 90,000 | ||||||
| 6 | $ 80,000 | $ 90,000 | ||||||
| 7 | $ (50,000) | $ (50,000) | ||||||
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