Project I Has an Initial Cash Outflow of $18,300 and Annual

Multiple Choice

Project I has an initial cash outflow of $18,300 and annual cash flows of $8,700 for Years 1 to 3.Project II has an initial cash outflow of $25,400 and annual cash flows of $10,500 for Years 1 to 3.These projects are mutually exclusive.The required rate of return is 11 percent.Based on the incremental NPV_{(II - I) ,} which project(s) should be accepted and why?

A) Project II;because the incremental NPV_{(II - I)} is negative
B) Project I;because both the incremental NPV_{(II - I)} and NPV_I are positive
C) Both Project I and II;because both project NPVs are positive
D) Project II;because it has the larger NPV
E) Project I;because the incremental NPV_{(II - I)} is negative and NPV_I is positive