Question

you are considering the following two mutually exclusive projects. the require return in each project is 12 percent. which project you should accept and what the best reason for the decision?

year project A project B

0 -$10,000 -$ 20,000

1 3,000 5,000

2 8,000 7,000

3 4,000 12,000

4 $ 2,000 $ 10,000

A.project A because it pays back faster

B. project A because it has the higher profitability index

C.project B because it has the higher profitability index

D. project A because it has the higher net present value

E. project B because it has the higher net present value

Answer #1

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