1.Emo Incorporated is reviewing the following projects for next year's capital program.

Project Initial Length Annual

Investment in Years Cash Flow

A$3.0 million 6 $719,374

B3.5 million 5970,934

C4.0 million 7904,443

D5.0 million 41,716,024

E6.0 million 61,500,919

F7.0 million 51,941,868

G8.0 million 71,725,240

Projects A and B are mutually exclusive and so are Projects D and E. Griffin-Kornberg has 10.5% cost of capital and a maximum of $14 million to spend on capital projects next year. Use capital rationing to determine which projects should be included in Emo's capital program.

A. Project A

B. Project B

C. Project C

D. Project D

E. Project E

F. Project F

G. Project G

2.Cheezburger Distributors handles the warehousing of perishable foods and is considering replacing one of its primary cold storage units.

Supplier A has offered a unit for $250,000 with an expected life of 10 years. The unit is projected to reduce electricity costs by $50,000 per year. However, it requires a $20,000 refurbishing every two years, beginning two years after purchase.

Supplier B has offered a cold storage unit with similar capabilities for $300,000. It will produce the same savings in electricity costs, but requires refurbishing every five years at a cost of $40,000.

Zuker's cost of capital is 8.5%. Use NPV to determine which cold storage unit Zuker should select. Round to the nearest dollar, enter negatives with a minus (-), don't include the "$" or commas.

a. Supplier A NPV = ? $

b. Supplier B NPV = ? $

c. The preferred supplier is ("Supplier A" or Supplier B") - ?