Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project E Project H

($54,000 investment ) ($48,000 investment)

Year Cash Flow ____________ Year Cash Flow

1 $12,000 __________________1 $24,000 2 16,000 ___________________2 17,000 3 26,000 ___________________3 18,000 4 33,000 a. Determine the net present value of the projects based on a zero percent discount rate.

Not Present Value

Project E ______________

Project H ______________

b. Determine the net present value of the projects based on a discount rate of 11 percent. (Do not round intermediate calculations and round your answers to 2 decimal places.)

Not Present Value

Project E ______________

Project H ______________

c. If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 11 percent? _Project E _Project H _Both H and E