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The table below presents cash flows for two investment projects, A and B. The opportunity cost of capital for each project is 8%. Cash Flow
The table below presents cash flows for two investment projects, A and B. The opportunity cost of capital for each project is 8%. Cash Flow in Year o Cash Flow in Year 1 Investment A B -6000 -2000 8000 3500 a) Calculate the NPV and the rate of return (IRR) for each investment. State your IRR answers in percent, e.g., 10%, not 0.10. % % IRR of A IRR of B NPV of A $ NPV of B $ b) Assuming you could only take one of these two investments, which one would you take? (Click to select) Machine A Machine B
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