1) Rocket Red, Inc. is considering a five-year project that has initial after-tax outlay or after-tax cost of $170,000. The future after-tax cash inflows from its project for years 1 through 5 are $45,000 for each year. Rocket Red uses the net present value method and has a discount rate of 11.25%. Will Rocket Red accept the project?

A) Rocket Red accepts the project because the NPV is about $5,455.

B) Rocket Red accepts the project because the NPV is about $165,275.

C) Rocket Red rejects the project because the NPV is about -$4,725.

D) Rocket Red rejects the project because the NPV is about -$154,725.

2) 7) Crossborder, Inc. is considering Project A and Project B, which are two mutually exclusive projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $140,000. Its future cash inflows for years 1 through 8 are the same at $36,500. Project B is a six-year project that has an initial outlay or cost of $160,000. Its future cash inflows for years 1 through 6 are the same at $48,000. Crossborder uses the equivalent annual annuity (EAA) method and has a discount rate of 13%. Which project(s), if any, will Crossborder accept?

A) Crossborder will take Project B because it has a positive NPV and its EAA is greater than that for Project A.

B) Crossborder rejects both projects because both have a negative NPV (and thus negative EAA).

C) Crossborder accepts both projects because both have a positive NPV (and thus positive EAA).

D) Crossborder accepts Project A because its EAA of about $7,975 is greater than Project B's EAA of about $6,440.

I'm confuse about those questions. It would be great if the answer included specific explain. Thank you!