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

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You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project A B Year 0 -$51 -$101 a. What are the IRRS of the two projects? Year 1 $24 $22 b. If your discount rate is 4.8%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? ... Year 2 $20 $41 Year 3 $22 Year 4 $14 $52 $60 a. What are the IRRS of the two projects? The IRR for project A is %. (Round to one decimal place.) The IRR for project B is %. (Round to one decimal place.) b. If your discount rate is 4.8%, what are the NPVs of the two projects? If your discount rate is 4.8%, the NPV for project A is $ If your discount rate is 4.8%, the NPV for project B is $ million. (Round to two decimal places.) million. (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) is measuring value creation, while NPV and IRR rank the two projects differently because they are measuring different things. is measuring return on investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial

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