If your company chose to invest in any of the following two projects, which would you choose from the perspective of profitability? Project A requires an initial investment of R200,000, with net cashflows of Year 1 = R60,000; Year 2 = R70,000; Year 3 = R80,000 Project B requires an initial investment of R200,000, with net cashflows of Year 1 = R40,000; Year 2 = R60,000; Year 3 = R90,000. (10)

The firms cost of funds is 10% Calculate the profitability of both projects and justify your selection.