A firm has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
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A firm has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $37,000 $37,000 1 19,370 6,850 2 14,870 13,350 3 12,370 19,850 4 9,370 23,850 If the required return is 14 percent, which one of the following is correct? A. Accept project A because it has higher NPV. B. Accept project B because it has higher NPV. C. Accept project B because it has higher IRR. D. Accept project A because it has higher IRR. E. cannot be determined.
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