Both Project A and project $B$ require a $$20,000$ net investment. Project A generates cash flows of $$10,000$ each year for four years. Project $B$ generates a $$60,000$ cash flow in year $4.$ The discount rate is $10\%.$ The NPV for $A$ is $$11,698\mathrm{.}65$ and the NPV for B is $$20,980\mathrm{.}80.$ The IRR for A is $34\mathrm{.}9\%$ and the IRR for B is $31\mathrm{.}61\%.$ If the projects are mutually exclusive, what is your recommendation?

Multiple Choice

Accept Because the NPV for B is greater than the NPV for $A.$

Accept both because they both have positive NPVs and the IRRs are greater than the discount rate.

$$ Accept A because the IRR for $A$ is greater than the IRR for B$.$

Choose A because the cash flows occur earlier and the time value of money says that current dollars are worth more than future dollars.