You are choosing between two projects the cash flows for


You are choosing between two projects. The cash flows for the project are given in the following table ($ million) :

Project Year 0 Year 1 Year 2 Year 3 Year 4

A) -$51 $25 $21 $21 $14

B) -$101 $18 $42 $48 $62

A. What are the IRRS of the two projects?

B. If your discount rate is 4.9%, what are the NPVs of the two projects?

C. Why do IRR and NPV rank the two projects differently?

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Financial Management: You are choosing between two projects the cash flows for
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