Candy Messinger is searching for good investments in which to place her firms capital. She is the CEO and president of PU Consulting and must decide which of the following mutually exclusive projects to invest in. Given below are the projects cash flows; all require the same initial investment of $2 billion. The appropriate discount rate for all projects is 12%

(a) Rank the projects using the NPV criterion

(b) Rank the projects using the IRR criterion.

(c) How does the answers to a) and b) change if the discount rate decreases to 10%?

(d) Suppose cash flows for all projects are expected to grow at the inflation rate of 5% (a negative cash flow simply becomes larger in absolute value). Assuming a discount rate of 12%, how do you rank the projects using the NPV and IRR criterion?