14. Dixie Dynamite Company is evaluating two methods of blowing up old buildings for commercial purposes over the next five years. Method 1 (implosion) is relatively low in risk for this business and will carry a 12 percent discount rate.

Method 2 (explosion) is less expensive to perform but more dangerous and will call for a higher discount rate of 16 percent. Either method will require an initial capital outlay of $75,000. The inflows from projected business over the next five years are given below. Which method should be selected using net present value analysis?

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Years Method 1 Method 2 1... $18,000 $20,000 2 24,000 25,000 3 34,000 35,000 4 26,000 28,000 5... 14,000 15,000