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In: Finance

The cash flows for the two projects are as follows? ($ million): Project Year 0 Year...

The cash flows for the two projects are as follows? ($ million):

Project

Year 0

Year 1

Year 2

Year 3

Year 4

A

- $ 100

$26

$28

$42

$52

B

-$ 100    $52 $42 $28    $18

a. What is the IRR of each? project?

b. What is the NPV of each project at your cost of? capital?

c. At what cost of capital are you indifferent between the two? projects?

d. What should you? do?

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