Capital budgeting criteria: mutually exclusive projects

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

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Project A -$500 $65 $65 $65 $235 $235

Project B -$400 $300 $300 $65 $65 $65

Which project would you recommend?

Select the correct answer. 1. Both Projects A and B, since both projects have IRR's > 0. II. Project A, since the NPVA > NPVB. III. Neither A or B, since each project's NPV NPVA. V. Both Projects A and B, since both projects have NPV's > 0