Question: Suppose that you have two mutually exclusive projects. A and B. Project A has cash flows of CF0, CF1, CF2, CF3, CF4, CF5. (Years 0-5).

Suppose that you have two mutually exclusive projects. A and B. Project A has cash flows of CF0, CF1, CF2, CF3, CF4, CF5. (Years 0-5). Project B has cash flow of CF0, CF1, CF2, CF3. The discount rate for the projects is 10.5%.

a) Analyze these two projects and recommend a project to accept.

b) Carefully outline all your analysis and reasoning and discuss your methodologies for arriving at your solution in detail.

	Project A	Project B
CF0	(4,650.00)	(8,300.00)
CF1	830.00	5,500.00
CF2	1,355.00	5,500.00
CF3	1,750.00	5,500.00
CF4	2,825.00
CF5	3,250.00

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