1. Two mutually exclusive projects have the following forecasted cash flows:

Year A B

0 -20,000 -20,000

1 10,000 0

2 10,000 0

3 10,000 0

4 10,000 60,000

1. Compute the internal rate of return for each project.
2. Compute the NPV for each project if the required rate is 10%.
3. Which project should be accepted, and why?