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You are considering the following two mutually exclusive projects. The required rate of return is 12%...

You are considering the following two mutually exclusive projects. The required rate of return is 12% for project A and 11% for project B. Which project should you accept and why?

Year Project A Project B
0           -$68,000   -$75,000
1                     28,000 15,000
2                     20,000   20,000
3                     20,000 20,000
4                     10,000 30,000

Business   Finance   
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Answer #1

Answer: None, Both Projects have negative NPV which implies that they would erode the value of firm

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