3. A company is considering two mutually exclusive projects. The initial cost of both projects is *50,000, and each has an expected life of five years. Under three possible states of economy, their annual cash flows and associated probabilities are as follows: NCFR) Economic State Good Probability Project A Project B 0.30 60,000 50,000 Normal Bad 0.60 0.10 40,000 40,000 20,000 30,000 If the discount rate is 7 per cent, which project should the company accept? Why?