The required rate of return (discount rate) is 20%. Our firm evaluates two mutually exclusive

projects A and B. Their cash flows are given in the following table:

Year A B

0 -3,000 -4,000

1 ?? 5,333

1. If the IRR of project A is 33.33%, what is the cash flow of the project in year 1?

2. Which project should be selected?