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Business, 06.04.2020 17:02 yeicooyola3

You are considering the following two mutually exclusive projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept and why?

Year Project A Project B
0 -$50,000 -$50,000
1 24,800 41,000
2 36,200 20,000
3 21,000 10,000

a. project A; because it has the higher required rate of return
b. project A; because its NPV is about $4,900 more than the NPV of project B
c. project B; because it has the largest total cash inflow
d. project B; because it has the largest cash inflow in year one
e. project B; because it has the lower required return

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