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Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....

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Accounting

Suppose your firm is considering two mutually exclusive,required projects with the cash flows shown below. The requiredrate of return on projects of both of their risk class is 10percent, and that the maximum allowable payback and discountedpayback statistic for the projects are 2 and 3 years,respectively.

  Time:0123
  Project A Cash Flow-37,00027,00047,00018,000
  Project B Cash Flow-47,00027,00037,00067,000


Use the NPV decision rule to evaluate these projects; which one(s)should it be accepted or rejected?

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