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

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

Year

Project A cash flow

Project B cash flow

0

-$100,000

-$100,000

1

33,000

0

2

33,000

0

3

33,000

0

4

33,000

0

5

33,000

220,000

If the appropriate discount rate on these projects is 10%, which project would be chosen and why?

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