Internal Rate of Return Projects A and B have the following cash flows: Year Project A Project B 0 2$1,000 2$2,000 1 C1A C1B 2 C2A C2B 3 C3A C3B a.

Internal Rate of Return Projects A and B have the following cash flows:

Year Project A Project B

0 2$1,000 2$2,000

1 C1A C1B

2 C2A C2B

3 C3A C3B

a. If the cash flows from the projects are identical, which of the two projects would have

a higher IRR? Why?

b. If C1B 5 2C1A, C2B 5 2C2A, and C3B 5 2C3A, then is IRRA 5 IRRB?