Question 2 Jacky's company can employ a capital or labour intensive method of producing a particular product. An evaluation of the two possibilities produces the following net cash flows, net present values at the required rate of return of 15%, and internal rates of return. Time Capital intensive method Labour intensive method 0 ($90,000) ($20,000) 1 132,000 9,750 2 100,000 9,750 3 (150,000) 9,750 IRR 42.66% 21.71%