A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows:

Project: A Project: B

Initial End-of-Year Initial End-of-Year Investment Cash Flows Investment Cash Flows $40,000 Year1- $20,000 $90,000 $40,000 Year 2- 20,000 40,000 Year 3- 20,000 80,000

You are a financial analyst in the firm and you dont like the payback approach. Your recommendation would be to (Suppose the firm's required rate of return is 15%)