# Economics NPV-IRR Analysis Question

**Question description**

Need help on this. Please show your work. Thanks !

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1. (20 Points) You have a choice between the following two mutually exclusive projects. Assume cash is received at the end of the year.

Net Cash Flow |
||

Year |
Project 'A' |
Project 'B' |

0 |
$(40,000.00) |
$(40,000.00) |

1 |
$ 30,000.00 |
$ - |

2 |
$ 20,000.00 |
$ - |

3 |
$ 10,000.00 |
$ - |

4 |
$ - |
$ 50,000.00 |

5 |
$ - |
$ 40,000.00 |

a. (5 points) Plot the present value profile for both projects on the same graph. (Use a range between 0-100%)

b. (5 points) Which project would you recommend if your investment opportunity interest rate is 10%? What is the NPV for each project at this rate?

c. (5 points) Which project would you recommend if your investment opportunity interest rate is 20% what is the NPV for each project at this rate?

d. (5 points) What is the IRR for each project?

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