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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%. Year Project

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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%. Year Project A Cash Flow Project B Cash Flow 0 -$250,000 - $250,000 1 90,000 130,000 2 90,000 130,000 3 90,000 130,000 4 90,000 5 90,000 Which of the following statements best describes projects A and B? Project A should be accepted because it has the highest NPV. Project should be accepted because it has the highest EAA Project A should be accepted because it has the highest EAA Neither project is acceptable Both projects should be accepted because they have positive NPVs and LAAS

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