Chandler Tire Company is trying to decide which one of two projects it should accept. Both projects have the same start-up costs. Project 1 will produce annual cash flows of $30,664.32 per year for ten years. Project 2 will produce cash flows of $27,482.29 per year for twelve years. The company requires a 9 percent rate of return. Which project should the company select and why?

A. Project 2, because the present value of the cash inflows exceeds those of Project 1 by $18,598.33.

B. Project 1, because the annual cash flows are greater by $4,000 than those of Project 2.

C. Project 2, because the total cash inflows are $72,000 greater than those of Project 1.

D. It does not matter as both projects have almost identical present values.

E. Project 1, because the present value of its cash inflows exceeds those of Project 2 by $14,211.62.