Your company has to choose between the following two projects Arctic and Bahammas, they are mutually exclusive projects and both requires a rate of return of 5%. The table below shows the net cash inflows for each project. Determine which project they should choose. You must show all working to receive full marks for a correct answer.

Which investment should the company select and why? (Assume a 0 % inflation rate).

Year	Arctic	Bahamas
0	-85,000	-90,000
1	56,000	51,000
2	61,000	49,000
3		55,000