You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flow:

Year Project a Cash Flow Project B Cash Flow

0 $-105,000 $-105,000

1 30,000 0

2 30,000 0

3 30,000 0

4 30,000 0

5 30,000 200,000

If the appropriate discount rate on these projects is 9 percent, which would be chosen and why

What is the NPV of project a?

$____ (Round to the nearest cent)

What is the NPV of project B?

$____ (Round to the nearest cent)

Which project would be chosen and why

A) choose both because they have a positive NPV's

B) Choose B because its NPV is higher

C) Choose A because its NPV is higher

D) Cannot choose without comparing the IRRS