Tara is evaluating two mutually exclusive capital budgeting…

Tara is evaluating two mutually exclusive capital budgeting projects that have the following characteristics:  Cash Flow Year Project Q Project R 0 $(4,000) $(4,000) 1 0  3,500  2 5,000  1,100        IRR 11.8%  12.0%   If the firm’s required rate of return (k) is 10 percent, which project should be purchased?