1. A firm is considering two projects. Both projects will cost $5,000. However, Project 1 will generate cash flows of $2,500 at the end of the first year and $7,500 at the end of the second year and Project 2 will generate cash flows of $7,500 at the end of first year and $2,500 at the end of the second year. Which project has the highest net present value if the required rate of return is 10%

A. Project 1

B. Project 2

C. Both projects have the same net present value

D. Cannot determine from information given

Choose the correct answer (multiple choice)