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6.14 You are considering two projects with the fol- lowing certain cash flows: Year 0...

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6.14 You are considering two projects with the fol- lowing certain cash flows: Year 0 Year 1 $170 Project A Project B -$100 -$200 $300 a. Calculate each project's NPV and IRR. Assume a discount rate of 5% and that the projects are mutu- ally exclusive. Which should you accept? In your answers to 6.14b and 6.14c assume you can borrow and lend at 5%. Show your financial trans- action with the bank. b. Suppose you wish to consume only at date : = 0. Which project would you choose? Why? c. Suppose you wish to consume only at date : = 1. Which project would you choose? Why? d. Use your answers to 6.14b and 6.14c to defend the NPV rule. 6.15 You have two mutually exclusive projects with the following cash flows

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