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You have analyzed two mutually exclusive (you can do one or the other not both) projects of similar size and have compiled the following information

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You have analyzed two mutually exclusive (you can do one or the other not both) projects of similar size and have compiled the following information based on your analysis. Both projects have 3- year lives. You have been asked for your best recommendation given this information. Do you accept Project A and why? Do you accept Project B and why? Project A Project B Net Present Value $571,224 $552,158 Payback Period 2.41 2.16 Average Accounting Return 12.34 12.78 Required AAR 11.5 11.5

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