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Lebron has analysed two mutually exclusive projects that have 3 - year lives. Project A has an NPV of $ 8 3 , 4 0

Lebron has analysed two mutually exclusive projects that have 3-year lives. Project A has an NPV of $83,406, a payback period of 2.48 years, and an ARR of 9.31 per cent. Project B has an NPV of $83,909, a payback period of 2.57 years, and an ARR of 9.22 per cent. The required return for Project A is 11.5 per cent while it is 12 per cent for Project B. Both projects have a required ARR of 9.25 per cent. Lebron must make a recommendation and justify it in 15 words or less. What should his recommendation be?

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