Npv profile versus irr profile


Problem:

Please help figuring this problem out. Please show all formulas.

Project        c0           c1         c2          c3

A           -$20,000 +$8,000 +$8,000 +$8,000

B           -$20,000       0           0      +$25,000

a. At what interest rates would you prefer project A to B? Hint: try drawing the NPV profile of each project.

b. What is the IRR of each project?

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Finance Basics: Npv profile versus irr profile
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