Aqua Inc. is working on capital budgeting decisions for next year. They have three possible projects: A, B and C. Project A has a cost of $6500 with annual expected cash inflows of $4000 and $2000. Project B has a cost of $4,000 with annual expected cash inflows of $4000 and $4000. Project C has a cost of $7,500 with annual expected cash inflows of $3000 and $2500 . At 5% discount rate which one of the following is correct?

Question 1 options:

	If Aqua Inc. does not have any constraints on how many projects it should invest only on Project A and B.
	Project C has a negative NPV, therefore, Aqua Inc. should invest on it only after investing in Projects B and A.
	If Aqua Inc. wants to invest only on one project, this project should be Project B.
	Project B is a better project than project A because project B has a lower cost.