YEAR CASH FLOW PROJECT A CASH FLOW PROJECT B

0 $-65,000 $-24,000

1 24,000 8,000

2 29,000 14,500

3 36,000 12,800

If the required return is 11% and the company applies the profitability Index decision rule, which project should the firm accept?

Select one:

a. Project B.

b. Boh A and B.

c. Project A.

d. None of them.