Projects A and B are mutually exclusive and have an initial cost of $82,000 each. Project A provides cash inflows of $34,000 a year for three years while Project B produces a cash inflow of $115,000 in Year 3. Which project(s) should be accepted if the discount rate is 11.7 percent? What if the discount rate is 13.5 percent? 

Multiple Choice 

Accept A at both discount rates 

Accept A at 11.7 percent and neither at 13.5 percent 

Accept B at both discount rates 

Accept both at 11.7 percent and neither at 13.5 percent 

Accept B at 11.7 percent and neither at 13.5 percent

Answer rating: 100% (QA)

YEAR 0 1 2 3 cash flows Project A 82000 34000 34000 34000 Project B 82000 0 0 115000 p... View the full answer