Question: Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is correct?

Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is correct?

Year	Project A	Project B
0	-96,000	-32,000
1	40,000	15,000
2	40,000	15,000
3	40,000	15,000
4	40,000	15,000

Because of time disparity, IRR indicates that Project A is better, but NPV indicates that Project B is better.

Time/size disparity is not a concern in this scenario.

Because of time disparity, IRR indicates that Project B is better, but NPV indicates that Project A is better.

Because of size disparity, IRR indicates that Project B is better, but NPV indicates that Project A is better.

Because of size disparity, IRR indicates that Project A is better, but NPV indicates that Project B is better.

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