Project a and B Have 4 Year Timelines

question 146

Multiple Choice

Project A and B have 4 year timelines. Project A has an initial investment of $120,000 and cash inflows of $50,000, $50,000 $30,000 and $30,000. Project B has an initial investment of $190,000 and cash inflows of $80,000, $70,000, $70,000 and $60,000. At what rate of interest would a company be indifferent at choosing project A or B?

• A) 25.77%
• B) 24.66%
• C) 23.55%
• D) 22.44%
• E) 21.33%