Dwight Donovan, the president of Finch Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of five years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $105,000 and for Project B are $44,000. The annual expected cash inflows are $25,609 for Project A and $11,607 for Project B. Both investments are expected to provide cash flow benefits for the next five years. Finch Enterprises desired rate of return is 4 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

1. What is the net present value of Project A?

2. What is the net present value of Project B?

3. Which project should be adopted?

4. What is the Internal Rate of Return for Project A?

5. What is the Internal Rate of Return for Project B?

6. Which project should be adopted?