Explain intuitively why project a must be better than b


Problem

Two mutually exclusive projects, A and B, require the same up-front investment in the first year. Project A generates positive net cash flows in years 2 through 5 and nothing after that. Project B generates nothing in years 2 through 5; positive net cash flows in years 6 through 10; and nothing after that. At an interest rate of 10 percent, project A is a better investment than project B. Explain intuitively why project A must be better than project B at higher interest rates as well.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Explain intuitively why project a must be better than b
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