You are choosing between the following Project A and Project B. If the interest rate is 8%, and the cash flow streams are as provided below, which would you select? You can only select one. Explain your selection.
|
Year
|
Project A Cash Flow Stream A
|
Project B Cash Flow Stream B
|
|
0
|
-$50,000
|
-$50,000
|
|
1
|
15,625
|
0
|
|
2
|
15,625
|
0
|
|
3
|
15,625
|
0
|
|
4
|
15,625
|
0
|
|
5
|
15,625
|
99,500
|