Keller Construction is considering two new investments. Project E calls for the purchase of earth moving 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.

Project E					Project H
($20,000 investment)					($20,000 investment)
Year	Cash flow				Year	Cash flow
1	$	5,000			1	$	16,000
2		6,000			2		5,000
3		7,000			3		4,000
4		10,000

(a)	Determine the net present value of the projects based on a zero discount rate. (Omit the "$" sign in your response.)

	Net present value
Project E	$
Project H	$

(b)	Determine the net present value of the projects based on a 9 percent discount rate. (Round "PV Factors" to 3 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

	Net present value
Project E	$
Project H	$

(d)

If the two projects are not mutually exclusive, what would your acceptance or rejection decision be if the cost of capital (discount rate) is 8 percent? (Use the net present value profile for your decision; no actual numbers are necessary.)

	Project E
	Project H
	Both H and E