Consider the following cash flows for projects A and B.
Year: 0 1 2 3 4 5 Project A: -$1000 375 375 375 375 -100
Project B: -$1000 900 700 500 -200 200 The cost of capital for both projects is 10%
a. Find the NPV and MIRR of projects A and B. If projects A and B are mutually exclusive, which project would you select?
b. Find the crossover rate for projects A and B.
c. What is the profitability index for projects A and B? How many IRRs exist for projects A and B?