Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Project E				Project H
($32,000 investment)				($27,000 investment)
Year	Cash Flow			Year	Cash Flow
1		$ 10,000		1		$ 15,000
2		13,000		2		13,000
3		14,000		3		11,000
4		16,000

a.	Determine the net present value of the projects based on a zero percent discount rate.

	Net Present Value
Project E	$
Project H	$

b.	Determine the net present value of the projects based on a discount rate of 9 percent. (Do not round intermediate calculations and round your answers to 2 decimal places.)

	Net Present Value
Project E	$
Project H	$

c.

If the projects are not mutually exclusive, which project(s) would you accept if the discount rate is 9 percent?

	Project E
	Project H
	Both H and E