Kirksville Company is considering two mutually exclusive investments. The projects expected net cash flows are as follows:
Year	Expected Net Cash Flows
Project A	Project B
0	-$1,300	-$405
1	$300	$100
2	$200	$100
3	$100	$100
4	$600	$100
5	$600	$100
Assume the required rate of return is 10%.
(1) Assuming that the projected future net cash flows for each project (from year 1 through 7) are net income, find the AAR? If you use the AAR method for capital budgeting analysis, which project would you choose? The target AAR is 10%. Explain.
(2) Find the crossover rate. You are absolutely required to provide the equation.
(3) Sketch the NPV profile for both projects. At least 5 points should be plotted.