The following cash flow and other financial data for two mutually exclusive projects A (with a life of 2 years) and B (with a life of 4 years).

	Expected Net Cash Flow
Year	Project A	Project B
0	-$100,000	-$100,000
1	60,000	33,500
2	60,000	33,500
3	-	33,500
4	-	33,500

Based on the risk analysis, the cost of capital is 10% for both projects.

Use the projects extended NPVs using the replacement chain approach.

Which project will you select and why?

	A.	Project B because its NPV using this approach is $7,234
	B.	Project B because its NPV using this approach is $10,234
	C.	Project A because its NPV using this approach is $5,687
	D.	Project A because its NPV using this approach is $7,547
	E.	None of the above