A company has to choose between two different investments. Investment A: This investment requires an immediate outlay of $70,000 and another investment of $50,000 in year 3. The investment will return annual profits of $45,000 from year 2 to year 7. At the end of year 7, the investment has a residual value of $15,000. Investment B: This investment requires an immediate outlay of $35,000 and additional investments of $20,000 per year from year 1 to year 3. The investment will return annual profits of $28,000 from year 4 to year 7. At the end of year 7, the investment has a residual value of $20,000. The cost of capital is 9%.

a. Calculate the NPV for investment A. b. Calculate the NPV for investment B.

c. Which investment should the company choose?