NPV versus IRR. Here are the cash flows for two mutually exclusive projects:
Project C0 C1 C2 C3
A -$20,000 +$8,000 +$8,000 +$8,000
B -$20,000 0 0 +$25,000
Q1. At what interest rates would you prefer project A to B? Hint: Try drawing the NPV profile of each project.
Q2. What is the IRR of each project?