Consider the following projects, A and B, where the firm can only choose one. Project A costs $800 and has cash flows of $500 in the first year and $600 in the second year. Project B costs $800, and generates cash flows of $700 and $500 in the next two years, respectively.

Cost of Capital	Project A	Project B
0%	$300	$400
5%	$200	$300
10%	$100	$200
15%	$50	$150
20%	$10	$100
25%	$(50)	$50

1. Sketch the NPV profile for each of these projects.
2. Which project should the firm choose if the cost of capital is 10%?
3. What if the cost of capital is 25%?
4. Discuss the sensitivity of each project to changes in the cost of capital.