You Are Considering Two Independent Projects

question 11

Multiple Choice

You are considering two independent projects.The required rate of return is 13.75 percent for Project A and 14.25 percent for Project B.Project A has an initial cost of $51,400 and cash inflows of $21,400,$24,900,and $22,200 for Years 1 to 3,respectively.Project B has an initial cost of $38,300 and cash inflows of $23,000 a year for 2 years.Which project(s) ,if either,should you accept?

• A)Accept both A and B
• B)Reject both A and B
• C)Accept A and reject B
• D)Accept B and reject A
• E)Accept either A or B but not both A and B

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