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Suppose you have two mutually exclusive projects, Project A and Project B, and the projects will be repeated at the end of their initial lives.

Suppose you have two mutually exclusive projects, Project A and Project B, and the projects will be repeated at the end of their initial lives. Both projects should be evaluated using a 10% WACC. Based on the cash flows below, which project should you accept?

Year A B

0 -50. -50

1 25 45

2 25 45

3 25

4 25

5 25

A. Reject Both

B. Project A

C. Project B

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