3. You are considering two independent projects with the following cash flows. The required rate of return is 10 percent for both projects. Project A has an initial cost of $950000 and cash inflows of $330000 $400000 and $400000 for Years 1 to 3 respectively. Project B has an initial cost of $125000 and cash inflows of $55000 $50000 and $50000 for Years 1 to 3 respectively. Given this information which one of the following statements is correct?

Question 2 options:

	You should accept project A because it has the higher NPV and you can not acceptboth projects.
	You should accept both projects if the funds are available to do so since both NPV's are > 0.
	You should accept project A because it has the lower NPV and reject project B.
	You should accept project B since it has the higher IRR and reject project A because you can not accept both projects.
	You should accept project B because it has the higher IRR and reject project A.