Blue Spruce Company is considering two new projects, each requiring an equipment investment of $101,800. Each project will last for three years and produce the following cash flows: Year Cool Hot 1 $40,400 $44,400 2 45,400 44,400 3 50,400 44,400 136,200 $133,200 The equipment will have no salvage value at the end of its three-year life. Blue Spruce Company uses straight-line depreciation and requires a minimum rate of return of 12%. Present value data are as follows: Present Value of 1 Period 12% 1 0.89286 2 0.79719 3 0.71178