Project A has cash flows of $4,000, $3,000, $0, and $3,000 for Years 1 to 4, respectively. Project B has cash flows of $2,000, $3,000, $2,000, and $3,000 for Years 1 to 4, respectively. Which one of the following statements is correct assuming the discount rate is positive? (No calculations needed.)

Multiple Choice

• The cash flows for Project B are an annuity, but those of Project A are not.

• Both sets of cash flows have equal present values as of Time 0.

• The present value at Time 0 of the final cash flow for Project A will be discounted using an exponent of three.

• Both projects have equal values at any point in time since they both pay the same total amount.

• Project B is worth less today than Project A.