NPV and IRR analysis of projectsThomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 10%, has estimated its cash flows as shown in the following table:

Project A Project B

Initial investment (CF₀) $140,000 $83,000 Year (t) Cash inflows (CF_t) 1 $30,000 $45,000 2 $20,000 $30,000 3 $40,000 $20,000 4 $45,000 $10,000 5 $70,000 $20,000

a.Calculate the NPV of each project, and assess its acceptability.

b.Calculate the IRR for each project, and assess its acceptability.