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You are choosing between two mutually exclusive projects with different lives. Project A has a NPV of $1000 and a life of 5 years. Project

You are choosing between two mutually exclusive projects with different lives. Project A has a NPV of $1000 and a life of 5 years. Project B has a NPV of $1500 and a life of 10 years. The firm does NOT plan to repeat the projects at the end of their lives. Both projects have a required return of 12%. Which project(s) should be accepted?

  • Project A only
  • Project B only
  • Both Project A and Project B
  • Neither Project A nor Project B

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