Assuming repeatability and given the information provided in the table below. What would be the best approach to select between manually exclusive projects A and B ?

Mutually Exclusive

Investment Projects

Project A Project B

Initial investment $60,000 $75000

Annual Revenues $40,000 $50,000

Annual cost $25,000 $32,000

Machine life 6 years 8 years

Select one:

1. Compute internal rate of return for each project and select the one with the higher internal rate of return
2. Compute the present worth for each project and select the one with the higher net present worth
3. Use and select either the project with the higher present worth, or the project with the higher annual worth, both approaches will give the same answer

4. Compute the annual worth for each project and select the one with the higher annual worth