ABC Corp. is considering two alternative projects. Project A requires an up-front expenditure of $20,000 today, has an expected life of five years, and generates cash flows of $3,500 every six months (all cash flows are realized at the end of the six months). Alternatively, the company can undertake Project B at a cost of $22,000 today. Project B will produce cash flows of $4,000 every six months for five years (all cash flows are realized at the end of the six months). Assume that the cost of capital is 12% p.a. compounded annually. If ABC Corp. chooses the machine that adds the most value to the firm using the NPV criterion, which project should the company choose? Answer the following questions, and choose the closest answer from the possible choices following each question: Choose... Choose... : What is the NPV for Project A? For Project A, how many cash flows will the project generate over its life? Evaluate the statement: The NPV method for capital investment projects uses the date of the last cash inflow as the focal date. (Answer Yes or No) For Project B, which TVM variable on the financial calculator does $4,000 represent? Which project (A or B) should ABC Corp. choose based on NPV criterion? Choose... Choose... Choose.. Evaluate the statement: The NPV method for capital investment projects takes the time value of money into consideration. (Answer Yes or No) Choose earch o i (75 ABC Corp. is considering two alternative projects. Project A requires an up-front expenditure of $20,000 today, has an expected life of five years, and generates cash flows of $3,500 every six months (all cash flows are realized at the end of the six months). Alternatively, the company can undertake Project B at a cost of $22,000 today. Project B will produce cash flows of $4,000 every six months for five years (all cash flows are realized at the end of the six months). Assume that the cost of capital is 12% p.a. compounded annually. If ABC Corp. chooses the machine that adds the most value to the firm using the NPV criterion, which project should the company choose? Answer the following questions, and choose the closest answer from the possible choices following each question: Choose... Choose... : What is the NPV for Project A? For Project A, how many cash flows will the project generate over its life? Evaluate the statement: The NPV method for capital investment projects uses the date of the last cash inflow as the focal date. (Answer Yes or No) For Project B, which TVM variable on the financial calculator does $4,000 represent? Which project (A or B) should ABC Corp. choose based on NPV criterion? Choose... Choose... Choose.. Evaluate the statement: The NPV method for capital investment projects takes the time value of money into consideration. (Answer Yes or No) Choose earch o i (75