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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13% Year Project

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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13% Year Project A Cash Flow Project B Cash Flow 0 -$175,000 -$175,000 1 53,000 78,000 2 53,000 78,000 3 53,000 78,000 4 53,000 5 53,000 Which of the following statements best describes projects A and B? Which of the following statements best describes projects A and B? O Project A should be accepted because it has the highest NPV. O Project A should be accepted because it has the highest EAA. Neither project is acceptable. Both projects should be accepted because they have positive NPVs and EAAs. O Project B should be accepted because it has the highest EAA

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