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Your division is considering two investment projects, each of which requires an up - front expenditure of $ 2 2 million. Project A will have

Your division is considering two investment projects, each of which requires an up-front expenditure of $22 million. Project A will have cash flows of $3 million in year 1, $4 million in year 2, $8 million in year 3, and $18 million in year 4. Project B will have cash flows of $17 million in year 1, $9 million in year 2, $4 million in year 3, and $2 million in year 4.
If Projects A and B are mutually exclusive and the cost of capital is 9%, which project do you accept?

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