Question

Benton Exploration Company is considering two mutually exclusive projects. Project A has a cost of $10,000...

Benton Exploration Company is considering two mutually exclusive projects. Project A has a cost of $10,000 and is expected to generate net cash flows of $4,000 per year for 5 years. Project B has a cost of $25,000 and is expected to generate net cash flows of $9,000 per years for 5 years. Benton's cost of capital is 15 percent.

Based on the net present value (NPV) method, which project should be undertaken?

Group of answer choices

Project A

Project B

Neither

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