Consider the following opportunities: Opportunity 1 requires a $6,050 cash payment now (Year 0) but will result in $17,600 cash received in Year 5. Opportunity 2 requires no cash outlay and results in $3,950 cash received in Year 3 and Year 5.

a. Use a 6 percent discount rate and determine whether Opportunity 1 or Opportunity 2 results in a greater NPV.

b. Use a 10 percent discount rate and determine whether Opportunity 1 or Opportunity 2 results in a greater NPV.