Project A has an NPV of $200K and an IRR of 30%. Project B has an NPV of $250K and an IRR of 20%. Both projects require an investment of 100K. Which of the following statements is correct if you can choose only one project?

1. Project A is preferred over Project B

2. Project A has a higher profitability index than Project B

3. Project B is preferred over Project A

4. None of the other statements above is correct