Question: 3. Projects A and B are mutually exclusive. Project A costs $10,000, and is expected to generate cash inflows of $4,000 (each year) for 4

3. Projects A and B are mutually exclusive. Project A costs $10,000, and is expected to generate cash inflows of $4,000 (each year) for 4 years. Project B costs $10,000 and is expected to generate a single cash flow in year 4 of $22,053. The cost of capital is 12 percent for each project. Which project would you accept and why?

Group of answer choices

A. Project B because it has the higher NPV.

B. Project A because it has the higher NPV.

C. Project B because it has the higher IRR.

D. Project A because it has the higher IRR.

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