ABC Co. is considering the following two mutually exclusive projects. The cash flows for project A are expressed in real terms, while those of project B are expressed in nominal terms. The appropriate nominal discount rate is 10% and the inflation rate is 3%.

Year	Project A	Project B
0	-55,000	-64,000
1	22,000	34,000
2	43,000	37,000
3	15,000	25,000

Using the exact Fisher equation, calculate the real discount rate. (Enter percentages as decimals and round to 4 decimals).

Calculate the NPV for project A. (Round to 2 decimals)

Calculate the NPV for project B. (Round to 2 decimals)

Based on the information provided, the firm should:

		accept both
		reject A, accept B
		accept A, reject B
		reject both