GS Fishing is considering two mutually exclusive investments. The projects' expected net cash flows are as follows:

Expected Net Cash Flows

Time Project A Project B

0 ($375) ($575)

1 ($300) $190

2 ($200) $190

3 ($100) $190

4 $600 $190

5 $600 $190

6 $926 $190

7 ($200) $0

Answer the following questions:

• If each project's cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice?
• Construct NPV profiles for Projects A and B.
• What is each project's IRR?
• What is the crossover rate, and what is its significance?