Question: You must decide between two mutually exclusive projects. Project A has cash flows of -$10,000; $5,000; $5,000; and $5,000; for years 0 through 3, respectively.

You must decide between two mutually exclusive projects. Project A has cash flows of -$10,000; $5,000; $5,000; and $5,000; for years 0 through 3, respectively. Project B has cash flows of -$20,000; $10,000; $10,000; and $10,000; for years 0 through 3, respectively. The firm has decided to assume that the appropriate cost of capital is 10% for both projects. Which project should be chosen? Why?

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