!. Net present value

a)assumes all projects are risk-free.

b)considers only cash flows occurring during the first 5 years of a project.

c)calculations consider the risk of each project.

d) is based on projected annual net income for each year of a projects life.

e)ignores the time value of money. 2) Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 7%. Use this information for the questions.

Year	Project A Cash Flow	Project B Cash Flow
0	-$32,400	-$14,400
1	9,720	4,320
2	9,720	4,320
3	9,720	4,320
4	4,860	2,160
5	4,860	2,160
6	2,430	2,160

Calculate the net present value of project A.

a)$3,802

b)$1,564.25

c)$1,227.71

d)$331.40

$2,709.21