A company is evaluating two investment projects: Project A and Project B. The company has a cost of capital of 10%. The cash flows for each project are as follows:

Project A:

• Initial investment of $100,000
• Cash inflows of $30,000 per year for 5 years

Project B:

• Initial investment of $120,000
• Cash inflows of $40,000 per year for 4 years

Which project should the company choose based on the net present value (NPV) method? Show all calculations and assumptions.