Problem:
Alpha Co. is investigating two mutually exclusive projects: A and B with common cost of capital k = 5%.
A: -$1000, $277, $277, $277, $277, $277 B: -$600, $175, $175, $175, $175, $175,
Required:
Question 1: Calculate the NPV's at 5% and IRR's.
Question 2: Sketch the NPV profiles together on a single pair axes.
Question 3: Explain which is preferred at k = 5%. Which would be preferred at k = 10%?
Note: Please show basic calculation