A company is considering two mutually exclusive projects with the following cash flows:

Project A:
Initial Investment: $100,000
Year 1 Cash Flow: $40,000
Year 2 Cash Flow: $60,000
Year 3 Cash Flow: $80,000

Project B:
Initial Investment: $80,000
Year 1 Cash Flow: $30,000
Year 2 Cash Flow: $50,000
Year 3 Cash Flow: $70,000

The company's required rate of return is 12%. Which project should they choose? Use the Net Present Value (NPV) method to support your answer.

Answer rating: 100% (QA)

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