Carrot Inc. is evaluating the following capital expidentures. Each has no estimated salvage value and will be depreciated on a straight line basis for 5 years. Project A has an investment outlay of $600,000 and project B will have an investment outlay of $900,000.

Year: Project A: Project B:

1 $150,000 $180,000

2 $150,000 $180,000

3 $120,000 $180,000

4 $100,000 $180,000

5 $50,000 $180,000

Calculate NPV for both projects at a discount rate of 12%

Calculate IRR of both projects