Question: Bumbles Bees, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -17,000 -17,000 1 8,000 2,000 2
Bumbles Bees, Inc., has identified the following two mutually exclusive projects:
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | -17,000 | -17,000 |
| 1 | 8,000 | 2,000 |
| 2 | 7,000 | 5,000 |
| 3 | 5,000 | 9,000 |
| 4 | 3,000 | 9,500 |
Over what range of discount rates would you choose Project A? Project B? At what discount rate would you be indifferent between these two projects? Explain.
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