QP8.14 14. NPV versus IRR. Here are the cash flows for two mutually exclusive projects: (LO8-1 and LO8-2) Project Co -$20,000 -20,000 CA +$8,000 0 C2 +$8,000 0 C3 +$ 8,000 +25,000 B a. At what interest rates would you prefer project A to B? (Hint: Try drawing the NPV profile of each project.) b. What is the IRR of each project? QP8.15 15. NPV/IRR. Growth Enterprises believes its latest project, which will cost $80,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the end of the first year will be $5,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5%. (LO8-1 and LO8-2) a. If the discount rate for this project is 10%, what is the project NPV? b. What is the project IRR