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We have two projects, A and B, and their cash flows are indicated in the table below. Note that a negative number is cash outflow,

We have two projects, A and B, and their cash flows are indicated in the table below. Note that a negative number is cash outflow, and a positive number is cash inflow. Suppose that the cost of capital is 20%. Also suppose that you follow the NPV rule to decide whether you will take a project.

Project

Time

0

1

2

3

A

-600

500

50

400

B

-900

300

500

300

Which statement is the most correct one?

A.

Accept neither project.

B.

Only accept project B.

C.

Accept both projects A and B.

D.

Only accept project A.

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