Blume & Casali Surveyors is trying to make a decision with respect to two projects: GC and GU. Upon careful consideration, the company has concluded that it only has the capacity to accept one of these projects. It should also be noted that both projects have the same start-up costs. However, GC will produce annual cash flow(s) of $52,000 a year for six years; whereas GU will produce cash flows of $48,000 a year for eight years.

Assuming that Blume & Casali Surveyors requires a 15% rate of return, which project should the firm accept (and why)?

(a) GC, because the annual cash flows are greater by $4,000 than those of GU;

(b) GC, because the present value of its cash inflows exceeds those of GU by $14,211.62;

(c) GU, because the total cash inflows are $72,000 greater than those of GC;

(d) GU, because the present value of the cash inflows exceeds those of GC by $18,598.33; or

(e) cottage cheese.