Question: Consider the following cash flows on three mutually exclusive projects: Year Project A Project B Project C 0 -$50,000 -$65.000 -$55,000 1 30,000 29,000 28,000

Consider the following cash flows on three mutually exclusive projects: Year Project A Project B Project C 0 -$50,000 -$65.000 -$55,000 1 30,000 29,000 28,000 2 25,000 38,000 27,000 3 20,000 41,000 33,000 The cash flows of Project A are expressed in real terms, whereas those of Project B and Project C are expressed in nominal terms. The appropriate nominal discount rate is 15 percent and the expected inflation rate is 4 percent. Of the three mutually exclusive projects, you should choose Project ____ .

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