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

LOADING...

.

a. What are the IRRs of the two projects?

b. If your discount rate is

4.9%,

what are the

NPVs

of the two projects?

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

Project

Year 0

Year 1

Year 2

Year 3

Year 4

A

$50

$23

$21

$20

$12

B

$98

$20

$39

$48

$59