Projects

A

and

B

are mutually exclusive. Project

A

costs

$20,000

and is expected to generate cash inflows of

$7,500

for 4 years. Project

B

costs

$10,000

and is expected to generate a single cash flow in year 4 of

$20,000

. The cost of capital is

12%

. Which project would you accept and why?\ Multiple Choice\ Project B because it has the higher NPV\ Project B because it has the higher IRR\ Project

A

because it has the higher NPV\ Project

A

because it has the higher IRR

Projects A and B are mutually exclusive. Project A costs $20,000 and is expected to generate cash inflows of $7,500 for 4 years. Project B costs $10,000 and is expected to generate a single cash flow in year 4 of $20,000. The cost of capital is 12%. Which project would you accept and why? Multiple Choice Project B because it has the higher NPV Project B because it has the higher IRR Project A because it has the higher NPV Project A because it has the higher IRR