Assume the firm can either take Project A or Project B. Project A will require the initial investment of $150,000 and will yield $33,000 at Year 1, $35,000 at Year 2, $38,000 at Year 3, $39,000 at Year 4, $39,000 at Year 5, and $38,000 at Year 6. Project B will require the initial investment of $170,000 and yield $44,000 at Year 1, $35,000 at Year 2, $26,000 at Year 3, $38,000 at Year 4, $89,000 at Year 5, and $68,000 at Year 6. If the interest/discount rate that applies to both project is 10.45%, which of these two projects is a better option if the decision is made based on the Net Present Value (NPV) basis?

Assume the firm needs to make a "mutually exclusive" decision where taking both projects is not an option because of the firm's inability (i.e. lack of resources) to do so.

Project A

Project B

Neither A nor B

We do not have sufficient information to answer this question.

Same facts as above: which project will be better under the (non-discounted) Payback Period standard?

Project A

Project B

Neither A nor B

We do not have sufficient information to answer this question.

Same facts as above: what about under the Discounted Payback Period standard?

Project A

Project B

neither A nor B

We do not have sufficient information to answer this question.