Question: Projects A and B are mutually exclusive. The required return on each project is 11 percent. Which project should you accept and what is the

Projects A and B are mutually exclusive. The required return on each project is 11 percent. Which project should you accept and what is the best reason for that decision?

Project A Project B
Year 0 -$15,000 -$15,000
Year 1 $9,000 $3,000
Year 2 $8,000 $5,000
Year 3 $5,000 $9,000
Year 4 $4,000 $11,000
A.

Project A; because it has the higher net present value
B.

Project B; because it has the higher profitability index
C.

Project A; because it has the higher profitability index
D.

Project A; because it pays back faster

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