Eureka Mining is considering buying a new machine. There are two choices available for the company. It may buy either machine P or machine Q. Cash flows for these two-mutually exclusive machines are given below:

Year	Machine P	Machine Q
0	-25,000	-25,000
1	13,000	5,500
2	12,315	7,500
3	6,200	12,000
4	4,200	13,000

The IRR of Project P is given as 20% and the IRR of Project Q is given as 16%.

Based on the IRRs given, which project do you choose?

When the discount rate is 6%, NPV of Project P is $6,757. Compute the NPV of the project Q if the discount rate is 6%. Which project would you choose?

Discuss if there is any inconsistency in the choice (using IRR and NPV) and what might be the reason for any such inconsistency.  

Notes: You may solve this question by trial and error method, using a financial calculator, using a spreadsheet. You may provide your answer as text information in the response box below (or attach a word or an excel file).