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2. Cash Flows are shown on the chart below: Year 0 1 2 Project A (S) (42000) 14000 14000 14000 14000 14000 Project B

2. Cash Flows are shown on the chart below: Year 0 1 2 Project A (S) (42000) 14000 14000 14000 14000 14000 Project B (S) (45000) 28000 12000 10000 10000 10000 3 4 5 Choice of Project Firm cost of capital is 10% a) Calculate the Net Present Value of the following Cash Flows for both project A & B. b) Explain which project to choose and why?

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