year Project A Project B
0 -$125,000 -$135,000
1 46,000 50,000
2 79,000 30,000
3 51,000 110,000
a. You should accept Project A and reject B based on their respective NPV's
b. You should accept project B and reject Project A based on their respective NPV's
c. You should accept project A and reject Project B based on their respective IRR's
d. You should accept Project B and reject PRoject A based on their respective IRR's
e. You should accept both projects based on both the NPV and IRR decision rules.
The solution answers the multiple choice question with a fair amount of detail. Overall, a good response to the question being asked.