You've estimated the following cash flows (in $) for two mutually exclusive projects:

Year	Project A	Project B
0	-5,500	-8,250
1	1,325	1,325
2	2,148	2,148
3	4,060	7,971

The required return for both projects is 8%.

1. What is the IRR for project A?

2. What is the IRR for project B

3. Which project seems better according to the IRR method?

Project B

Project A

4. What is the NPV for project A?

5. What is the NPV for project B?

6. Which project seems better according to the NPV method?

Project B

Project A

7. Compare the answers to parts 3 and 6. If both projects are mutually exclusive, which one should you accept?

Project A

Project B