Company X received the approval to start no more than two projects in the current calendar year.

Three different projects were recommended, each of which requires an investment of 1,000 to be made at the beginning of year 1.

The cash flows for each of the three projects are as follows:

End of year	Project A	Project B	Project C
1	200	500	400
2	500	300	250
3	200	-175	100
4	-300	150	-200
5	300	600	700

The company uses an annual effective interest rate of 5% to discount its cash flows.

Determine which combination of projects the company should select.

A) Project C

B) Project A

C) Project B

D) Project B and C

E) Project A and C