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1. We have two mutually exclusiveinvestments with the following cash flows: (13 markstotal)

Year	Investment A	Investment B
0	-$100	-$100
1	50	20
2	40	40
3	40	50
4	30	60

1. Using a financial calculator, calculate the IRR for each of theinvestments. (1 mark)

b. Based on the IRR rule and arequired return of 15%, which investment should we choose?  

c. Calculate the NPV profile for eachinvestment, using the discount rates of 0%, 5%, 10%, 15%, 20%, and25%. Perform this task in an Excel spreadsheet. Cautionarynote: If you use the =NPV() function in Excel to calculatethe NPVs, it will provide incorrect answers. The NPV() functionactually calculates the present value of all cash inflows. The NPVshould be calculated as =NPV(all cash inflows) – initial cashoutflow.                                                          

d. Plot the NPV profile for bothprojects using the X-Y scatter function inExcel.                                                                                                    

e. If the required return on thisproject is 16%, would both NPV and IRR give us the same conclusion?Explain youranswer.                                              (2.5marks)

f.   If the required returnon this project is 9%, would both NPV and IRR give us the sameconclusion? Explain youranswer.                                              (2.5marks)

h. Calculate the crossover rate atwhich we are indifferent between the twoinvestments.