You are considering the following two projects and can take only one. Your cost of capital is 10.5%. The cash flows for the two projects are as follows ($ million):

a. What is the IRR of each project?

b. What is the NPV of each project at your cost of capital?

c. At what cost of capital are you indifferent between the two projects?

d. What should you do?

project

year 0

year 1

year 2

year3

year 4

A	-100	25	28	40	49
B	-100	49	40	28	19