Project A		Project B
Initial cash outlay	$(200,000)		$(140,000)
Future cash inflows:
Year 1	$ 50,000		$ -
Year 2	50,000		-
Year 3	50,000		-
Year 4	50,000		40,000
Year 5	50,000		90,000
Year 6	50,000		140,000
Total cash inflows	$300,000		$ 270,000

The companys cost of capital is 8%, which is an appropriate discount rate. Required:

1. Compute the net present value of each project. Use a clear presentation of the solution for full marks.

2. Assume Q Corporation has limited funds to invest and is considering two projects, both with positive net present values. Explain (no calculations needed) how the two projects should be ranked. A clear and well worded accurate explanation will earn full marks