Consider projects A and B:

Cash Flows (dollars)

Project C_{0 C1}C₂ NPV at 12%

A 32,500 23,000 23,000 +$6,371

B 52,500 35,500 35,500 +7,497

a.Calculate IRRs for A and B.(Do not round intermediate calculations. Enteryour answers as a percent rounded to 2 decimal places.)

b.Which project does the IRR rule suggest is best?

• Project A or
• Project B?

c.Which project is really best?

• Project A or
• Project B?