A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below:
Year Project S Project L
0 ($2,000) ($2,000)
1 1,800 0
2 500 500
3 20 800
4 20 1,600
The company's cost of capital is 9%, and it can get an unlimited amount of capital at that cost. What is the regular IRR (not MIRR) of the better project? (Hint: Note that the better project may or may not be the one with the higher IRR.)