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You are a consultant with a private firm and you have been given data for two projects. Each of the projects. Each of the projects

You are a consultant with a private firm and you have been given data for two projects. Each of the projects. Each of the projects requires an initial capital outlay of: $2,000 and give rise to different patterns of net cash flows as follows:

PROJECT

YR 0

YR 1

YR 2

YR 3

YR 4

A

2000

600

480

360

240

B

2000

240

360

480

600

Required

The cost of capital is 13%. Evaluate this project using NPV and B/C investment criteria and give your recommendation/advice.

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