You are considering the following two mutually exclusive projects. The required rate of return is 10.75 percent for project A and 12 percent for project B. Which project should you accept and why? Project A -36,000 21,600 18,200 22,100 Project B -69,900 52,600 46,100 Year 1 2 3 0 Project B; because it has the largest total cash inflow Project A; because its NPV is about $796 more than the NPV of Project B Project B; because it returns all its cash flows within two years Project A; because it has the lower required rate of return Project B; because it is the largest sized project

You are considering the following two mutually exclusive projects. The required rate of return is 10.75 percent for project A and 12 percent for project B. Which project should you accept and why? Year Project A Project B 0 -36,000 -69,900 1 21,600 52,600 2 18,200 46,100 3 22,100 0 Project B; because it has the largest total cash inflow Project A; because its NPV is about $796 more than the NPV of Project B Project B; because it returns all its cash flows within two years Project A; because it has the lower required rate of return Project B; because it is the largest sized project