Question: A firm is considering two projects, Project A and Project B. The projects are independent and the cash flows are shown below: 0 1 2

A firm is considering two projects, Project A and Project B.

A firm is considering two projects, Project A and Project B. The projects are independent and the cash flows are shown below: 0 1 2 3 4 -50 20 20 15 10 YEAR PROJECT A PROJECT B -60 25 15 25 12 If the cost of capital is 12%, what is the correct decision for the firm? Reject project A and accept project B Accept project A and reject project B Accept project A and accept project B. Reject both projects

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