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 $ 0

2 $30,000 $ 0

3 $30,000 $ 0

4 $30,000 $ 0

5 $30,000 $210,000

If the appropriate discount rate on these projects is 11 percent, which would be chosen and why? (Round to the nearest cent.)

a. The NPV of Project A is: $

b. The NPV of Project B is: $

Which project would be chosen and why? (Select the best choice below.)

a. Cannor choose without comparing their IRRs.

b. Choose A because its NPV is higher.

c. Choose both because they both have positive NPVs.

d. Choose B because its NPV is higher.