Problem 12 K. Intro You've estimated the following cash flows (in $) for two mutually exclusive projects: w No Year Project A Project B -5,300 -7,950 1,325 1,325 2,148 2,148 3,822 7,479 The required return for both projects is 8%. 18 Attempt 1/10 for 10 pts. Part 1 What is the IRR for project A? Correct The IRR is that discount rate that sets the NPV to zero: CF CF2 NPV = 0 = CF0 + 1+ IRR (1 + IRR) CF3 (1 + IRR)" 1,325 2,148 3,822 +0= -5,300 + 1+ IRR. (1+IRR) +- (1 + IRR) Since this is a non-linear equation, it cannot be solved analytically. However, we can use trial and error, a financial calculator or Excel's IRR function to do it for us. We then find that the IRR is 14.9%, or 0.149. IB - Attempt 1/10 for 10 pts. Part 2 What is the IRR for project B? 3+ decimals Submit