Textiles Unlimited has gathered projected cash flows for two projects. At what interest rate would the company be indifferent between the two projects? Which project is better if the required return is 12 percent?

Year Cash Cash Flow

0 -$105,000 -$105,000

1 42,000 52,600

2 34,600 39,400

3 38,700 35,500

4 40,500 30,100

A. 11.76 percent; A

B. 12.49 percent; A

C. 12.49 percent; B

D. -4.44 percent; A

E. -4.44 percent; B