Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate capital expenditure projects. Assuming the two projects have the costs and cash flows shown below, determine the NPV for each using a replacement chain. 

Year           Project S          Project T 

0               –$70,000          –$100,000 

1                $50,000              $ 60,000 

2                 $60,000              $ 70,000 

3                          -                  $ 80,000 

4                          -                   $ 90,000 

Assume in two years Project S will still cost $70,000 and produce the same two years of cash flows.

a. NPVs = $14,690: NPVT = $109,240

b. NPVs = $8,860: NPVT = $109,240

c. None of these are correct

d. NPVs = $40,020: NPVT = $109,240