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

$(110,000)

$(110,000)

1

30,000

00
2

30,000

00

3

30,000

00

4

30,000

00

5

30,000

230,000

If the appropriate discount rate on these projects is

8%,

which would be chosen and why?

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