You are considering the following two mutually exclusive projects with the following cash flows. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value.

Year	Project A	Project B
0	-$45,000	-$40,000
1	$17,500	$8,200
2	$18,000	$14,600
3	$22,500	$36,800

	Project A	Project B
Required rate of return	8 percent	12 percent
Required payback period	2 years	2 years
Required accounting return	8.5 percent	9.5 percent

You should accept Project _____ because its internal rate of return (IRR) is _____%.

Question 19 options:

a	A; 13.22
b	A; 14.67
c	B; 13.92
d	B; 17.79
e	The IRR should not be used to determine which of these projects should be accepted.