You are the head of a firm's capital budgeting department. You ask a recently hired employee to calculate the IRR and NPV of a project the CFO has asked your department to analyze. The project has an upfront investment, a series of positive annual cash flows, and then due to a cleanup cost at the end, a final cash flow that is negative. The cost of capital is $14\%.$ Here are the numbers you were given by the employee:

NPV $=-$$$254,230($note negative$)$

Two IRRs $($as we know this is possible when the signs of the cash flows in sequence switch more than once$)$: $12\mathrm{.}50\%$ and $19\mathrm{.}50\%$

What should you tell the CFO?

a$.$Accept the project because the highest IRR exceeds the cost of capital

b$.$Accept the project because the average IRR $($which is $16\%)$ exceeds the cost of capital

c$.$Reject the project because the NPV is negative and the IRR is unreliable