Consider the following mutually exclusive investments T=0 1 2 Investment A: -100 20 120 Investment B: -100 100 31.


Find IRRs for both projects

Draw a graph, where you will show the NPV of each project as a function of its discount rate (i.e NPV on the vertical axis and r on the horizontal axis). Both NPVs should be on the same graph.

Find the cross over rate

Please describe as fully as possible which project is the best.

year A B 012IRRDiscount NPV – A5% $10% $15% $20% $25% $30% $ -10020120 -10010031.25 20.00% 25.00%NPV- B$$$$$$ 27.8917.368.13-7.20-13.61 23.5816.7410.595.03-4.59 NPV…

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