Cummings Products is considering the two mutual exclusive investments whose expected net cash flows are:

Year Project A Project B

0 $-400 $-650

1 -528 210

2 -219 210

3 -150 210

4 1,100 210

5 820 210

6 990 210

7 -325 210

A.) Construct NPV profiles for Projects A and B

B.) What is each Projects IRR?

C.) If each projects cost of capital were 10%, which project, if either, should be selected? If the cost of capital were 17%, what would be the proper choice?

d.) what is each projects MIRR at the cost of capital at 10%. At 17% (Hint: consider Period 7 as the end of the Project Bs life.)

e.) what is the crossover rate, and what is its significance.