1. Calculate the net present value for each project.

2. Which investment should be made, if projects are mutually exclusive?

oil wells or aluminum smelter

I need step by step explanation plus answer.

Canadian Metal, Mining, and Petroleum Company is analyzing two projects for possible investment. Only one investment will be made. The first project is an oil drilling project in Alberta at a cost of $500 million that will produce $100 million per year in Years 5 through 10 and $200 million per year in Years 11 through 20. The second project is an expansion of an aluminum smelter in Mapletree, Quebec, and will cost $500 million and will produce $87 million per year for Years 2 through 20. The cost of capital is 12 percent. a-1. Calculate the net present value for each project. (Do not round Intermediate calculations. Round the final answers to the nearest whole dollar. Enter your answers in whole dollars, not in millions.) Oil wells Aluminum smelter a-2. Which investment should be made, if projects are mutually exclusive? OOil wells Aluminum smelter Net present value $ $ b-1. If the oil-well project justifies an extra 4 percent premium over the normal cost of capital because of its riskiness and relative uncertainty of flows, recalculate the net present value of the mine. (Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter your answers in whole dollars, not in millions.) Oil wells Net present value $ b-2. Does the investment decision change? OYes O NO