Question: You are considering the following two mutually exclusive projects. The required rate of return is 14.0 percent for project A and 13.8 percent for project
You are considering the following two mutually exclusive projects. The required rate of return is 14.0 percent for project A and 13.8 percent for project B. Which project should you accept and why?

| project A; because its NPV is about $4,900 more than the NPV of project B | ||
| project A; because its NPV is about $5,132 more than the NPV of project B | ||
| project A; because its NPV is about $5,527 more than the NPV of project B | ||
| project B; because it has the largest cash inflow in year one | ||
| project B; because it has the lower required return |
Year 0 1 2 3 Project A $50,000 24,800 36,200 21,000 Project B $50,000 41,000 20,000 10,000
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