Word The cost of capital for a firm is 10%. The firm has two mutually exclusive investments with the following cash flows: Problem #2. YEAR INV. A $300 $200 $100 INV. B $200 $200 $200 a) Each investment cost $480. Which investment should be made according to NPV? b) What is the IRR on each investment and which one should be made according to the IRR? c) If the cost of capital rises to 148, which investment should be made