A company is considering two mutually exclusive investment projects. Each requires an initial investment of $22,000. Project A will generate an annual profit of $6000 for eight years and have a residual value of $4000. Project Bs profits are more irregular: $17,000 in the first year, $23,000 in the fifth year, and $26,000 (including the residual value) in the eighth year.

Which project should be chosen if the required return on investment is 8.5% compounded annually?