Part D: Investment Decisions Now consider that Luxio has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$34,000 -$34,000 1 $16,500 $5,000 2 $14,000 $10,000 3 $10,000 $18,000 4 $6,000 $19,000. 1. What is the IRR for each of these projects? Based on IRR decision rule, which project should the company accept? 2. If the required return is 11%, what is the NPV for each of these projects? Based on the NPV decision rule, which project should the company accept? 3. Over what range of discount rates would the company choose project A? At what discount rate would the company be indifferent between these two projects? Explain. Appendix A: Ratio Calculations and Analysis Short-term solvency ratios Current ratio Quick ratio Cash ratio Asset utilization ratios Total asset turnover Inventory turnover - Receivables turnover Long-Term solvency ratios - Debt-equity ratios - Times interest earned ratio, Cash coverage ratio Profitability ratios Profit margin Return on assets - Return on equity Market value ratios - Price-earnings ratio Dividends per share Market to book ratio