Your company is considering two mutually exclusive projects, A and B, whose costs and cash flows are shown below. The projects are equally risky, and their cost of capital is 11%. Choose the correct recommendation.

Year 0 1 2 3 4

Cash Flow A -3,100 960 1,080 1,200 1,440

Cash Flow B -2,500 800 900 1,000 1,200

a) Since the NPV and the IRR of project A are both higher than the NPV and the IRR of project B, project A is recommended.

b) The two projects have about the same NPV, but since the IRR of project B is materially higher than the IRR of project A, project B is recommended.

c) The two projects have about the same NPV, but since the IRR of project A is materially higher than the IRR of project B, project A is recommended.

d) Since the NPV and the IRR of project B are both higher than the NPV and the IRR of project A, project B is recommended.