You are considering the following two mutually exclusive projects with the following cash flows:

Project A Project B

Year Cash Flow Year Cash Flow

0 -$75,000 0 -$70,000

1 $19,000 1 $10,000

2 $48,000 2 $16,000

3 $12,000 3 $72,000

Required rate of return 10 % 13 %

Calculate the NPV, IRR, profitability index for each project. Which project will you choose? For each project, what do you observe about NPV, IRR, and profitability index? Do they lead you to the same decision?