Imagine that you are faced with three alternative projects, each of which costs $1 Million (M). Assuming the discount rate of 10 percent and efficiency is your only criterion, which one of these projects would you choose to undertake?

Project A: A bridge which takes one year to build, then yields $400,000 benefit per year for the next 2 years. Assume that the costs are paid upfront.

Project B: Temporary classrooms for schools yielding $400,000 benefit per year for three years starting from Y1. Assume that all costs are paid in Y1.