Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate capital expenditure projects. Assuming the two projects have the costs and cash flows shown below, determine the NPV for each using a replacement chain. Year Project S Project T 0 $70,000 $100,000 1 $50,000 $ 60,000 2 $60,000 $ 70,000 3 $ 80,000 4 $ 90,000 Assume in two years Project S will still cost $70,000 and produce the same two years of cash flows.

a. None of these are correct

b. NPVs = $14,690: NPVT = $109,240

c. NPVs = $40,020: NPVT = $109,240

d. NPVs = $8,860: NPVT = $109,240