Consider the following two mutually exclusive projects, each of which requires an initial investment of $30,000 and both provide cash inflows of $60,000 as shown below. This organization has a 15% cost of capital.

Year Project A Project B

0 ($30,000) ($30,000)

1 $30,000 $30,000

2 10,000 20,000

3 20,000 10,000

Using the net present value criterion, which is the most desirable project?

Question 1 options:

	Project A
	Project B
	Both projects A and B are equally acceptable.
	Neither project A or B is acceptable.