Question 7 (6 points) Saved Maxima Construction is considering 2 long-term capital investment projects. Each investment has a useful life of 6 years. Relevant data for each project follows: Project A Project B Capital Investment $ 200,000 $ 220,000 Annual Profit $ 25,000 $ 22,000 Additional Information: Depreciation is calculated by the straight-line method with no residual (salvage) value. The company's cost of capital rate is 10%. Refer to the excerpts of the Present Value Tables provided below. Required: 1. Compute the net present value for each project. (Round to nearest dollar) (2 marks per project, 4 marks total) 2. Which Project would you recommend and why? (2 marks) All of your work must be clearly labelled and laid out so that the marker can follow and grade it. All calculations must be shown using the following symbols: add (+). subtract(). multiply (x) divide (7) Present Value (PV) of $1 Present Value (PV) of an Annuity of $1 2% 4% 6% 8% 10% 2% 4% 6% 8% 10% 1 0.98039 0.96154 0.94340 0.92593 0.90909 1 0.98039 0.96154 0.94340 0.92593 0.90909 2 0.961171 0.92456 0.89000 0.85734 0.82645 2 1.94156 1.88609 1.83339 1.78326 1.73554 3 0.94232 0.88900 0.83962| 0.79383 0.75131 3 2.88388 2.77509 2.67301 2.57710 2.48685 4 0.92385 0.85480 0.79209 0.73503 0.68301 43.80773 3.62990 3.46511 3.31213 3.16987 5 0.90573 0.82193 0.74726 0.68058 0.62092 5 4.71346 4.45182 4.21236 3.99271 3.79079 6 0.887971 0.79031 0.70496 0.63017 0.56447 6 5.60143 5.24214 4.91732 4.62288 4.35526 7 0.87056 0.75992 0.66506 0.58349 0.51316 76.47199 6.00205 5.58238 5.20637 4.86842 8 0.85349 0.73069 0.62741 0.54027 0.46651 8 7.32548 6.73274 6.20979 5.74664 5.33493 0.83676 0.70259 0.59190 0.50025 0.42410 98.16224 7.43533 6.80169 6.24689 5.75902 10 0.82035 0.67556 0.55839 0.46319 0.3855410 8.98259 8.11090 7.360096.71008 6.14457 9