Capital budgeting criteria: mutually exclusive projects

A firm with a WACC of 10% is considering the following mutually exclusive projects:

Project A	-$300	$75	$75	$75	$220	$220
Project B	-$550	$250	$250	$80	$80	$80

Which project would you recommend?

Select the correct answer.

I. Both Projects A and B, since both projects have IRR's > 0.

II. Project A, since the NPVA > NPVB.

III. Project B, since the NPVB > NPVA.

IV. Neither A or B, since each project's NPV < 0.

V. Both Projects A and B, since both projects have NPV's > 0.