Here are the cash-flow forecasts for two mutually exclusive projects:

	Cash Flows (dollars)
Year	Project A				Project B
0	−	120			−	120
1		50				69
2		70				69
3		90				69

a-1. What is the NPV of each project if the opportunity cost of capital is 2%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a-2. Which project would you choose?

b-1. What is the NPV of each project if the opportunity cost of capital is 14%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-2. Which would you choose?

Answer rating: 100% (QA)

To calculate the NPV Net Present Value of each project we need to discount the cash flows to their p... View the full answer