1. A firm is considering four possible independent project options. Project A has a present value cost of $9,000 and yields benefits of $4,280 per year for 4 years. Project B has a present value cost of $10,000 and yields benefits of $4,560 per year for 3 years. Project C has a present value cost of $8,000 and yields benefits of $3,500 per year for 3 years. Project D has a present value cost of $7,500 and yields a benefit of $5,500 per year over 3 years.

Assuming a discount rate of 10%, estimate the following:

a) Net Present Value (NPV) of the four projects

b) Discounted Benefit-Cost Ratio for the four projects

c) Net discounted Benefit-Cost Ratio for the four projects

d) Rank projects using the NPV criteria

e) Rank projects using the Benefit-cost ratio

f) Explain why the two criteria do not give the same ranking