We have two mutually exclusive projects A and B. Both require initial costs of $10,000 and last for 4 years. Project A has expected future cash flows of $4,000, $5,000, $8,000 and $3,000, respectively. Project B has expected future cash flows of $8,000, $9,000, $2,000 and -$3,000. If the required return for project A is 12% and the required return for project B is 9%, which project should we start?

We have two mutually exclusive projects A and B. Both require initial costs of $10,000 and last for 4 years. Project A has expected future cash flows of $4,000,$5,000, $8,000 and $3,000, respectively. Project B has expected future cash flows of $8,000, $9,000,$2,000 and $3,000. If the required return for project A is 12% and the required return for project B is 9%, which project should we start? Choose project A because its NPV is higher than project B Choose project B because its NPV is higher than project A Choose project A because project B has negative future cash flows Choose project A because its required retum is higher than project A