Question: A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows: Project: A Project: B _____________________________ _____________________________ Initial

A firm is evaluating two projects that are mutually exclusive with initial

investments and cash flows as follows:

Project: A Project: B

_____________________________ _____________________________

Initial EndofYear Initial EndofYear

Investment Cash Flows Investment Cash Flows

$40,000 20,000 $90,000 $40,000

20,000 40,000

20,000 80,000

The financial analyst determines that the firm's required rate of return is 15%. His recommendation using NPV would be to

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