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Project Year 0 Year 1 Year 2 Year 3 Year 4 A -50 24 21 19 17 B -98 21 39 52 58 You are

Project Year 0 Year 1 Year 2 Year 3 Year 4

A -50 24 21 19 17

B -98 21 39 52 58

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.8%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?

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