Question: You are considering two mutually exclusive projects. You have sufficient funds. However, you cannot repeat or replicate these projects more than once. Project A has

You are considering two mutually exclusive projects. You have sufficient funds. However, you cannot repeat or replicate these projects more than once. Project A has a discount rate of 15%. The project requires an initial investment of $100,000 and generates cash flows of $50,000, $0, and $100,000 in years 1 to 3, respectively. Project B has a discount rate of 20%. It requires an initial investment of $100,000 and generates cash flows of $100,000, $0, and $50,000, in years 1 to 3, respectively. What is your investment decision and its NPV?

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