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Quebec Inc. is considering investing in one of the two projects. Both projects have an initial investment requirement of $ 1 0 0 , 0

Quebec Inc. is considering investing in one of the two projects. Both projects
have an initial investment requirement of $100,000. Project A is riskier and is
expected to generate $0 in years 1 and 2, $250,000 in year 3. Project B is
"low risk" and is expected to generate $60,000 annually in years 1 to 3. Both
projects end after year 3.
a. A is better than B because it is expected to generate more cash.
b. There is insufficient information to make a rational choice between A and B.
c. B is better than A because it has a shorter payback period.
d. B is better than A because it is of lower risk.

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