James works in the finance department of a company; he is evaluating two projects' net present value. The following table shows the expected cash inflows that will be generated by these two projects. The initial investments are＄1,000,000 for both projects. 

(a) Calculate the NPV for Project A and Project B, respectively.

(b) If two projects are mutually exclusive, which project should James choose, and why?

(c ) Discuss the drawback of the NPV method.

There is no discount rate.

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Year 1 2 3 Project A Cash inflows $300,000 $300,000 $700,000 Project B Cash Flow $600,000 $400,000 $300,000 Year 1 2 3 Project A Cash inflows $300,000 $300,000 $700,000 Project B Cash Flow $600,000 $400,000 $300,000