A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000.
The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project.
 
The second project would be the development of a new product which could produce the following net profits after the end of the project:
1. year:        $  15,000
2. year:  $  125,000
3. year:  $  220,000

Assumed is a discount rate of 5% per year. Looking at the present values of the benefits of these projects in the first 3 years, what is true?
  
 
A.  Both projects are equally attractive.
B.  The first project is more attractive by app. 7%.
C.  The second project is more attractive by app. 5%.
D.  The first project is more attractive by app. 3%.