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Keller Construction is considering two new investments. Project E calls for the purchase of earth-moving equipment. Project H represents the investment in a hydraulic lift.

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Keller Construction is considering two new investments. Project E calls for the purchase of earth-moving equipment. Project H represents the investment in a hydraulic lift. Keller wishes to use a NPV profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B. Project E ($35,000 investment) Project H ($30,000 investment) Year 1 2 3 Cash Flow $10,000 13,000 16,000 18,000 Year 1 2 3 Cash Flow $ 16,000 16,000 15,000 4 a. Determine the NPV of the projects based on a zero discount rate. NPV Project E Project 1 $ b. Determine the NPV of the projects based on a 9 percent discount rate. (Round "PV Factors" to 3 decimal places. Round the final answers to the nearest whole dollar.) NPV $ Project E Project 1 $ c. Not available in Connect. d. If the two projects are not mutually exclusive, what would your acceptance or rejection decision be if the cost of capital (discount rate) is 10 percent? (Use the NPV profile for your decision; no actual numbers are necessary.) O Project E O Project H O Both Hand E e. If the two projects are mutually exclusive (the selection of one precludes the selection of the other), what would be your decision if the cost of capital is (1) 8 percent, (2) 15 percent, (3) 33 percent? Use the NPV profile for your answer. 8% cost of capital 15% cost of capital 33% cost of capital (Click to select) (Click to select) (Click to select)

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