Consider the following two projects:

Cash flow of Project A:

Year 0 1 2 3 4 5

CF 100 100 100 100 100 -650

Cash flow of Project B:

Year 0 1 2 3 4 5

CF 100 100 100 100 100 -750

a) Find the IRRs of the two projects. Based on IRR, which project has the higher value? Which is actually better? Explain.

b) Find the NPVs of the two projects. Which is better?

c) Do the incremental IRR analysis of taking project B instead of project A. Does this match your NPV results? Explain.