Manager A: A 4-year project with initial investment (Year 0) of -$100,000. Year 1 projected revenue is $90,000, year 2 $105,000, Year 3 $65,000 and year 4 $95,000. The cost of goods sold for year 1 thru 4 is 25% of revenues, SG&A expense is 15% of revenues, no interest expenses, and corporate tax rate is 35%. Once the project is over, there is no more related cash flow. There is no depreciation expense. Manager B: These are the projected net after tax cash flows for the project. This is an eight years project. Cash Flow Year 0 -110,000 1 15,000 2 25,000 3 25,000 4 24,000 5 19,000 6 19,000 7 13,000 8 19,000 Questions 3: After closer examination, you realize that required return for manager B's project is actually 16% due to higher risk. If this is the case, which project would you choose based on IRR and NPV? (Required return for manager A is still 10%). Support your decisions with calculations and numbers. Also describe the effect to IRR with the change in higher risk. Be sure to explain the reasons in the effect to the IRR. 12.5 points