10. Karla is looking at two investment opportunities which have the following expected cash flows. If her minimum required return is 22%, which proposal would be the best based on what the instructor indicated was the more appropriate evaluation method?

Investment A Investment B

Year 0 $( 1,400,000) $( 1,400,000)

Year 1 $ 454,000 $ 456,000

Year 2 $ 887,000 $ 891,000

Year 3 $ 760,000 $ 750,000

Year 4 $ 155,000 $ 145,000

a. Neither proposal would add value.

b. Choose Proposal A because it has the highest IRR.

c. Choose Proposal A because it has the highest NPV.

d. Choose Proposal B because it has the highest IRR.

e. Choose Proposal B because it has the highest NPV.