You are considering the following two mutually exclusive projects. If the cost of capital for both projects is 7%, which statement concerning capital-budgeting rules listed will be correct in this situation?

Time

Year

0

Year

1

Year

2

Year

3

Project

A

-

$567

$300

$400

$300

Project

B

-

$296

$500

$100

$50

a)

Both NPV and IRR will choose the correct

project(s).

b)

Neither NPV nor IRR will choose the correct project(s).

c)

NPV will choose the correct project(s), IRR will not.

d)

IRR will choose the correct project(s), NPV will not.