You Are Considering Two Independent Projects That Have a Required

Multiple Choice

You are considering two independent projects that have a required return of 15 percent.Project A has an initial cost of $198,700 and cash inflows of $67,200,$109,600,and $88,700 for Years 1 to 3,respectively.Project B has an initial cost of $102,000 and cash inflows of $37,600 and $91,200 for Years 1 and 2,respectively.Given this information,which one of the following statements is correct based on the NPV and IRR methods of analysis?

A) You should accept both projects.
B) You should accept Project A and reject Project B.
C) You should accept Project B and reject Project A.
D) NPV indicates accept Project A while IRR indicates accepting Project B.
E) You should reject both projects.