The following two mutually exclusive projects are being evaluated. The firm's required rate of return is 12%.

Year	Project A Cash Flow	Project B Cash Flow
0	-$48,000	-$48,000
1	15,000	20,000
2	15,000	20,000
3	15,000	15,000
4	15,000	5,000
5	15,000	5,000
6		5,000
7		5,000

Which of the following statements best describes projects A and B?

Project B should be accepted because it has the highest EAA.

Neither project is acceptable.

Both projects should be accepted because they have positive NPVs and EAAs.

Project B should be accepted because it has the highest NPV.

Project A should be accepted because it has the highest EAA.