Question: You are considering the following two mutually exclusive projects. Which project(s) should be recommended? Project A Project B Year Cash Flow Year Cash Flow 0

You are considering the following two mutually exclusive projects. Which project(s) should be recommended?

Project A Project B

Year Cash Flow Year Cash Flow

0 -$75,000 0 -$70,000

1 $19,000 1 $10,000

2 $48,000 2 $16,000

3 $12,000 3 $72,000

Required rate of return:

10 percent (for A) 13 percent (for B)

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