A firm must choose between two mutually exclusive projects, Project A and Project B. Project A is a three-year project with the following cash flows in each of the three years: 5,000, 4,000 and 3,000. Project B is also a three-year project with the following cash flows in each of the three years: 1,000, 4,000 and 8,000. If, for each project, the firm's cost of capital is 10%, and the initial investment is 10,000, which project should be preferred and why?

Select one:

a. Project A because it has a greater NPV.

b. Project B because it has a greater NPV.

c. Project B because of greater total inflows.

d. Both projects provide equal return to the firm.

e. None of the projects should be accepted.