A company is evaluating its asset values based on each subset project they manage at the time. They're short in terms of human and money resources and need to shut down a few projects. Details of the two main projects are described below:

Project 1- initial investment: 500k, 2 year period, which produces 100 k in the first year, and 50 K in the second year, and a target rate of return of 5%

Project 2- initial investment: 500k, 2 year period, which produces 50 k in the first year, and 100 K in the second year, and a target rate of return of 5%

Which project do you think the company needs to shut down?

Select one:

a. project 2

b. project 1