3. You are considering the following two mutually exclusive projects. The required rate of return is 11 percent (which is the same as the discount rate) for project A and 10 percent for project B. Which project should you accept and why?

Year     Project A      Project B

0         -$48,000         -$126,900

1         $18,400           $69,700

2          $31,300           $80,900

3         $11,700            $  0

5. You are considering two mutually exclusive projects with the following after-tax cash flows. Will your choice between the two projects differ if the required rate of return (which is the same as the discount rate) is 8 percent instead of 11 percent? If so, what should you do?

Year          Project A        Project B

0              -$240,000        -$198,000

1                $  0                  $110,800

2               $ 0                     $ 82,500

3            $325,000             $45,000