1.Gold Corporation performed a treasury analysis this year and determined that it had $150,000 to invest into a new project this year.After much consideration, Gold narrowed down options to 2 mutually exclusive projects, A and B.Information on Projects A and B are below:

Project AProject B

Initial investment$150,000 (fixed cost)$150,000 (fixed cost)

Units to sell5,0008,500

Sales price per unit$100$150

Variable costs per unit$35$70

Project A will result in tax free income, while Project B's income will be taxed at 25%.Which project should Gold Corporation choose and why?