Textiles Unlimited has gathered projected cash flows for two projects. At what interest rate would the company be indifferent between the two projects? Which project is better if the required return is 12 percent?

Year        Cash           Cash Flow

0            -$105,000      -$105,000

1               42,000            52,600

2               34,600            39,400

3               38,700            35,500

4               40,500            30,100

A. 11.76 percent; A

B. 12.49 percent; A

C. 12.49 percent; B

D. -4.44 percent; A

E. -4.44 percent; B