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Given the following projects A and B which are mutually exclusive and their respective cash flows which project

Question

Given the following projects A and B which are mutually exclusive and their respective cash flows, which project

would you choose if

i) The rate of return is 8 percent [3 marks]

ii) The rate of return is 11 percent [3 marks]

iii) How is the decision affected by the rate of return? What should the project manager do [2 marks]

Year Project A Project B

0 -$240,000 -$198,000

1 $ 0 $110,800

2 $ 0 $ 82,500

3 $325,000 $ 45,000

Project Management

Given the following projects A and B which are mutually exclusive and their respective cash flows which project