2. Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. Evaluate the best project using the investment and cash flow patterns given below. Project E ($52,000 Investment) Project H ($47,000 Investment) Year Cash Flow Year Cash Flow 1 $ 10,000 1 $ 27,000 2 14,000 2 19,000 3 24,000 3 15,000 4 31,000

a. Evaluate the net present value of the projects based on a zero percent discount rate. (4 marks)

b. Evaluate the net present value of the projects based on a discount rate of 9 percent. (4 marks) Note: Do not round intermediate calculations and round your answers to 2 decimal places.

c. If the projects are not mutually exclusive, evaluate which project(s) would you accept if the discount rate is 9 percent? (2 marks)