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The annual incremental cash flows from projects A and B are given below. Both projects have the same discount rate. Using the logic of time

The annual incremental cash flows from projects A and B are given below. Both projects have the same discount rate. Using the logic of time value, which of the following is true as long as your discount rate is positive?

Project

Start of Year 1

Start of Year 2

Start of Year 3

Start of Year 4

Start of Year 5

Start of Year 6

A

100

100

100

-100

-100

-100

B

-100

-100

-100

100

100

100

  1. Project A is better than project B
  2. Project B is better than project A
  3. Projects A and B will be of equal value
  4. There is not enough information to answer this question.

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