1-Compute the NPV for Project X with the cash flows shown below if the appropriate cost of capital is 10 percent.

time 0 1 2 3 4 5

cash flow -125 -125 0 200 175 150

2- Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time: 0 1 2 3

Project A Cash Flow -34000 24000 44000 15000

Project B Cash Flow -44000 24000 34000 64000

Use the NPV decision rule to evaluate these projects; which one(s) should it be accepted or rejected?