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You are considering two independent projects. The required rate of return is 13.75 percent for Project A and 14.25 percent for Project B. Project A
You are considering two independent projects. The required rate of return is 13.75 percent for Project A and 14.25 percent for Project B. Project A has an initial cost of $51,400 and cash inflows of $21,400, $24,900, and $22,200 for Years 1 to 3, respectively. Project B has an initial cost of $38,300 and cash inflows of $18,000 a year for 3 years. Which project(s), if any, should you accept?
A. | Reject both Projects. | |
B. | Accept both projects. | |
C. | Accept Project B and reject Project A. | |
D. | Accept project A and reject Project B. |
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