Two projects being considered are mutually exclusive and have the following projected cash flows:

	Project A	Project B
Year	Cash Flow	Cash Flow
0	-$50,000	-$50,000
1	15,625	0
2	15,625	0
3	15,625	0
4	15,625	0
5	15,625	99,500

If the required rate of return on these projects is 10 percent, which would be chosen and why?

Question 9 options:

	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.
	Neither, because both have IRRs less than the cost of capital.