Table 12.6 Yong Importers, an Asian Import Company, Is Evaluating Two Mutually

Multiple Choice

Table 12.6
Yong Importers, an Asian import company, is evaluating two mutually exclusive projects, A and B. The relevant cash flows for each project are given in the table below. The cost of capital for use in evaluating each of these equally risky projects is 10 percent.
-Which project should be chosen using the Annualized NPV approach? (See Table 12.6)

A) Project A because its annualized NPV is higher
B) Project B because its NPV is higher
C) Project A because its IRR is higher
D) Project B because its annualized NPV is higher