Consider the following cash flows on two mutually exclusive projects:

Year Project A Project B

0 $ 52,000 $ 67,000

1 32,000 31,000

2 27,000 40,000

3 22,000 43,000

The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent. Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Which project should you choose? Project A Project B