Question: Two projects being considered are mutually exclusive and have the following cash flows: Year Project A Project B 0 -$50,000 -$50,000 1 15,625 0 2

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

Year Project A Project B
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?

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