Project a Has an Initial Cost of $75,000 and Annual

Multiple Choice

Project A has an initial cost of $75,000 and annual cash flows of $33,000 for three years.Project B costs $60,000 and has cash flows of $25,000,$30,000,and $25,000 for Years 1 to 3,respectively.Projects A and B are mutually exclusive.The incremental IRR is ________ and if the required rate is higher than the crossover rate then Project ________ should be accepted.

A) 13.94 percent; A
B) 12.89 percent; B
C) 12.89 percent; A
D) 13.94 percent; B
E) 15.86 percent; A