Please solve the question step by step, without using excel or a financial calculator. 1. You are considering two mutually exclusive projects with the following cash flows. Will your choice between the two projects differ if the required rate of return is 8% rather than 11%? If so, what should you do?

A. yes; Select A at 8% and B at 11%.

B. yes; Select B at 8% and A at 11%.

C. yes; Select A at 8% and select neither at 11%.

D. no; Regardless of the required rate, project A always has the higher NPV.

E. no; Regardless of the required rate, project B always has the higher NPV.

2.( You only need to provide the answer for this)

Martin Fillmore is a big football star who has been offered contracts by two different teams. The payments (in millions of dollars) he receives under the two contracts are listed below:

Team A Team B

Year Cash Flow Cash Flow

0 $8.0 $3

1 4.0 4.0

2 4.0 4.0

3 4.0 8.0

4 4.0 8.0

Fillmore is committed to accepting the contract that provides him with the highest net present value (NPV). At what discount rate would he be indifferent between the two contracts?

a. 10.85%

b. 11.35%

c. 14.45%

d. 19.67%

e. 21.03%