Question: Cash flows for projects F and G are given below. Cash Flows, ($) Project C 0 C 1 C 2 C 3 C 4 C

Cash flows for projects F and G are given below.

	Cash Flows, ($)
Project	C₀		C₁			C₂			C₃			C₄			C₅
F		10,100		+	7,100		+	6,100		+	5,100			0			0
G		10,100		+	2,020		+	2,020		+	2,020		+	2,020		+	2,020

The cost of capital for projects of this type is 11%. Assume that the forecasted cash flows are overstated and should be 7% lower than those provided by the project analyst. But a lazy financial manager, unwilling to take the time to argue with the projects sponsors, instructs them to use a discount rate of 18%. Assume the year 5 cash flow is a perpetuity.

a. What are the projects true NPVs? (Do not round intermediate calculations. Round your answers to 2 decimal places.

	NPV
Project F	$
Project G	$

b. What are the NPVs at the 18% discount rate? (Do not round intermediate calculations. Round your answers to 2 decimal places.

	NPV
Project F	$
Project G	$

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