Problem: Two mutually exclusive investment projects have the following forecasted cashflows:
Year A B
0 -20000 -20000
1 10000 0
2 10000 0
3 10000 0
4 10000 60000
1) Compare the internal rate of return for each project
2) Compute the net present value for each project if the firm has a 10 percent cost of capital
3) Which project should be adopted? and Why?