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You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):

Project Year 0 Year 1 Year 2 Year 3 Year 4 A -51 26 22 22 12 B -100 18 38 48 59

a. What are the IRRs of the two projects?

b. If your discount rate is 5.4%, what are the NPVs of the two projects?

c. Why do IRR and NPV rank the two projects differently?

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