The State of Ohio is considering the following two mutually exclusive projects (i.e., you cant do both projects) to fund out of its new capital budget. Assuming the State of Ohio has a discount rate of 5%, make a recommendation on which project the State should choose and justify the recommendation numerically.

Project A Project B

Year Cash Flow Year Cash Flow

0 -$250,000 0 -$240,000

1 $45,000 1 $5,000

2 $75,000 2 $120,000

3 $95,000 3 $120,000

4 $118,000 4 $72,000