Question: A division manager is choosing between two mutually exclusive projects. Project A Project B Net present value $470,000 $420,000 Internal rate of return 12% 14%

A division manager is choosing between two mutually exclusive projects. 

                                                 Project A             Project B 

Net present value                  $470,000              $420,000 

Internal rate of return                   12%                     14% 

The company requires any project to earn at least 10%. 

The manager believes that cash inflows from the project can be reinvested at the rate of 10%. Which of the following will the manager likely choose? 

Select one: 

a. Project B 

b. Project A 

c. Both Projects A and B 

d. Neither Project A nor B

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