Consider the following opportunities: Opportunity 1 requires a $4,000 cash payment now (year 0) but will result in $14,000 cash received in year 5. Opportunity 2 requires no cash outlay and results in $3,500 cash received in year 3 and year 5.

a. Use a 6 percent discount rate and determine whether Opportunity 1 or Opportunity 2 results in a greater NPV.

b. Use a 10 percent discount rate and determine whether Opportunity 1 or Opportunity 2 results in a greater NPV.