Your division is considering two investment projects, each of which requires an up-front expenditure of 20 million. You estimate that the investment will produce the following net cash flows:

Year Project A Project B

1 $5,000,000 $20,000,000

2 $10,000,000 $10,000,000

3 $20,000,000 $6,000,000

a.What are the two projects net present values, assuming the cost of capital is 5%? 10%? 15%?

b.What are the two projects IRRs at these same costs of capital?Show your work