Dorian International Has $75,000 That It Can Invest for 2

Multiple Choice

Dorian International has $75,000 that it can invest for 2.5 years.After that,the funds are needed to repay an outstanding bond issue.The company has two potential projects that are within the funding limit.Project A has an initial cost of $40,000 and cash flows of $24,000 a year for 2 years.Project B has an initial cost of $75,000 and cash flows of $27,000 a year for 4 years.If the required rate of return on both projects is 12 percent,what is your recommendation?

A) Accept Project A and reject Project B
B) Reject Project A and accept Project B
C) Accept either Project A or Project B,but not both
D) Reject both projects
E) Accept both projects