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The following are two independent projects that you are evaluating. The first project has cash flows...

The following are two independent projects that you are evaluating. The first project has cash flows of −$161,900, $60,800, $162,300, and -$75,000 for Years 0 to 3, respectively. The second project has cash flows of −$175,600, $261,800, -$165,000, $145,000 and -$75,000. Which of these, best summarizes your situation?

A. Project 1 has 2 IRRs and Project 2 has 2 IRRs. Therefore, we should not use IRR to evaluate the projects.

B. Project 1 has 1 IRR and Project 2 has 2 IRRs. Therefore, we should use IRR only to evaluate Project 1.

C. Project 1 has 2 IRRs and Project 2 has 3 IRRs. Therefore, we should not use IRR to evaluate the projects.

D. Project 1 has 3 IRRs and Project 2 has 4 IRRs. Therefore, we should not use IRR to evaluate the projects.

E. None of the above is correct.

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