Question 1 Suppose that you are investigating two mutual exclusive investments (investment A and B) which correspond to two listed firms (firm A and firm B, respectively). The Net Cash Flows of these investments are the following: t1 to (1,000) (1,000) 1,000 100 t3 50 1,300 0 The risk free interest rate is 2% and the market portfolio return is 7%. The beta coefficient (systematic risk) for firm A and B is equal to 0.5 (i.e. ba=bB=0.5). Which would be your investment choice according to the Net Present Value (NPV) and the Internal Rate of Return (IRR) investment appraisal techniques? Is there any difference in the decisions made based on the NPV and the IRR criteria? Discuss in detail your arguments and provide the underlying economic intuition