Question: You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A Cash Flow Project B

You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:

Year Project A Cash Flow Project B Cash Flow 0 $(102,000) $(102,000) 1 $35,000 $0 2 $35,000 $0 3 $35,000 $0 4 $35,000 $0 5 $35,000 $210,000

If the appropriate discount rate on these projects is 11 percent, which would be chosen and why?

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