1. Your Company expects to earn at least 15 percent on its investments.You have to choose between two similarprojects. Below is the cash information for each project. Your analysts predict that inflation rate will be a stable 5 percent over the next 7 years. Which of the two projects would you fund if the decision is based only on financial information? Why?

Alpha Year	Inflow	Outflow	Netflow	Beta Year	Inflow	Outflow	Netflow
Y0	0	$ 225,000	-225,000	Y0	0	$ 300,000	-300,000
Y1	0	190,000	-190,000	Y1	$ 50,000	100,000	-50,000
Y2	$ 150,000	0	150,000	Y2	150,000	0	150,000
Y3	220,000	30,000	190,000	Y3	250,000	50,0000	200,000
Y4	215,000	0	215,000	Y4	250,000	0	250,000
Y5	205,000	30,000	175,000	Y5	200,000	50,000	150,000
Y6	197,000	0	197,000	Y6	180,000	0	180,000
Y7	100,000	30,000	70,000	Y7	120,000	30,000	90,000
Total	1,087,000	505,000	582,000	Total	1,200,000	530,000	670,000