Question: Norman, Inc., is considering two mutually exclusive projects. Project A is a six-year project with a NPV of $3,000 and Project B is a four-year

Norman, Inc., is considering two mutually exclusive projects. Project A is a six-year project with a NPV of $3,000 and Project B is a four-year project with an NPV of $2,278. Project A has an equivalent annual cash flow of $730 and Project B has an equivalent annual cash flow of $750. Which project should the firm select?

Choose Project A because it has the higher NPV.

Choose Project B because it has the lower NPV.

Choose Project B because it has the higher equivalent annual cash flow.

Choose Project A because it has the lower equivalent annual cash flow.

Now I can see that the answer is C but I dont understand why it is C? Project A has the higher NPV and has 6 years of almost equal cash flows?

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