Hammer Company is considering the following two investment proposals:

The cash flow for the first proposal is as follows:

Initial investment:
Depreciable assets (straight-line)	$54,000
Working capital	6,000
Operations (per year for 4 years):
Cash receipts	$37,500
Cash expenditures	16,500
Disinvestment:
Salvage value of equipment	$4,500
Recovery of working capital	6,000

The second proposal is an investment proposal with the following cash flows:

The initial investment of this proposal is $100,000. The promised returns are: a semi-annual annuity of $5,500 for 8 years (the first payment is received at the end of the first 6 months after the initial investment is made).

Assuming that the cost of funds for the company is 8% and the risk is the same for both projects, determine the net present value for each investment and identify the most profitable investment. You may use a financial calculator or spreadsheet. Show your work.