Consider two mutually exclusive projects. Project A requires you to pay $500 today, and it will pay you $180 at the end of each of the next 4 years (t = 1, 2, 3, and 4). Project B pays you $550 today, and requires that you pay out $210 at the end of each of the next 4 years (t = 1, 2, 3, and 4). The cost of capital is 10% Which statement is correct?

1-The NPV rule recommends accepting B, the IRR method recommends accepting A but the IRR is an invalid method for project A, and the firm should accept project B.

2-The NPV rule recommends accepting B, the IRR method recommends accepting A, and because the IRR is a superior method the firm should accept project A.

3-The NPV rule recommends accepting A, the IRR method recommends accepting B but the IRR is an invalid method for project B, and the firm should accept project A.

4-The NPV rule recommends accepting A, the IRR method recommends accepting B, and the firm should accept project B.