Project Water has an initial cost of $598,900 and projected cash flows of $302,000, $264,000, and $250,000 for Years 1 to 3, respectively. Project Aqua has an initial cost of $512,200 and projected cash flows of $290,000, $214,000, and $220,000 for Years 1 to 3, respectively. What is the incremental IRR_AB of these two mutually exclusive projects?

Multiple Choice

• 8.67%

• 6.93%

• 2.75%

• 11.06%

• 4.37%