Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent.

Year Deepwater New Sub

0-$955,000-$1,860,000

1375,000 910,000

2 514,000 805,000

3 425,000 760,000

Compute the IRR for both projects

Deepwater - 21.8

Submarine - 20.4

Calculate the incremental IRR for the cash flows

Incremental IRR 16.5%

Compute the NPV for both projects

Deepwater - $14,258

Submarine - $13,768

Where am I going wrong?