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To find the internal rate of return (IRR) on the incremental cash flows, we need to subtract the cash flows of project A from project
To find the internal rate of return (IRR) on the incremental cash flows, we need to subtract the cash flows of project A from project B for each year, and then calculate the IRR for these incremental cash flows. Here's the table for the incremental cash flows: | Year | Incremental Cash Flow (B - A) | |------|-------------------------------| | 0 | -3,500 | | 1 | 0 | | 2 | 0 | | 3 | 0 | | 4 | 0 | | 5 | 0 | Now, when all incremental cash flows are the same (zero), the IRR is also zero. Thus, the correct answer is not listed among the choices. It's important to note that the IRR of the incremental cash flows would only be relevant if there were actual incremental cash flows to analyze
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