Omega Ltd. is evaluating two mutually exclusive projects, Project O and Project P.

Project Cash Flows and IRR:

Project	C0 ($ thousands)	C1 ($ thousands)	C2 ($ thousands)	IRR (%)
O	-65	30	35	20.85
P	-75	40	30	18.95

The required rate of return is 12%.

Requirements:

1. Explain the drawbacks of using IRR exclusively.
2. Calculate the NPV for both projects.
3. Recommend which project should be selected based on NPV.
4. Discuss any strategic considerations that might affect the choice.