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Consider capital budgeting projects A and B which yield the following cash flows over their five year lives. If the cost of capital for each

Consider capital budgeting projects A and B which yield the following cash flows over their five year lives. If the cost of capital for each project is 10%, what is accepted if mutually-exclusive?

Year Investment A Investment B

0

-$1,000 -$1,000

1

500 100
2 400 200
3 200 200
4 200 400
5 100 700

Question 29 options:

Accept Project A only

Accept Project B only

Accept both Project A & B

Reject both Project A & B

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