Your firm is considering one of two projects for investment. Project A costs $15,000 and will bring cash flows of $3,193 for 7 years. Project B costs $13,000 and will yield cash flows of $4,485 for 4 years. Given t these two projects do not have the same productive lives and your firm's cost of capital is 6%, which project should you select and why?

Because the initial investment is lower, choose project B

Because its NV is higher, choose project A

O Because its NPV

is higher, choose project B

Because the initial investment is lower, choose project A

Because its equivalent annual benefit is higher, choose project B