Answer:
                                              Project A                  Project B
Initial investments               ($170,000)               ($115,000)
CF Year 1                              $42,500                  $34,500 
CF Year 2                             $58,500                  $52,500 
CF Year 3                             $82,795                  $68,500 
CF Year 4                             $92,900                  $68,500 
CF Year 5                             $67,500                  $68,500
using an excel spreadsheet and the IRR function, the internal rate of return of each project is:
- Project A's IRR = 26.02%
- Project B's IRR = 36.31%
We can use the discount rate (12%) to calculate the projects' NPV, we do not need it to calculate their IRR:
- Project A's NPV = $70,855
- Project B's NPV = $88,815