Axios, Inc. is considering Project A and Project B, which are two mutually exclusive projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $180,000. Its future cash inflows for years 1 through 8 are $38,000. Project B is a six-year project that has an initial outlay or cost of $160,000. Its future cash inflows for years 1 through 6 are the same at $36,000. Axios uses the equivalent annual annuity (EAA) method and has a discount rate of 11.50%. Will Axios accept the project?

		Axios accepts Project A because its EAA is about $2,396 and Project B's EAA is only about $1,097.
		Axios accepts Project A because its NPV (and thus EAA) is positive and Project B's NPV (and thus EAA) is negative.
		Axios rejects both projects because both have a negative NPV (and thus negative EAA).
		Axios accepts Project B because it has a more positive EAA.