of XYZ Corporation is faced with two mutually exclusive investment opportunities. The cost of capital is 12 percent. The cash flows for the two projects are: Project A Project B Year Cash Flow Cash Flow 0 -$140,000 -$100,000 1 60,000 30,000 2 60,000 30,000 3 60,000 30,000 4 30,000 5 30,000 6 30,000 .

What is the NPV for each investments UNDER THE REPLACEMENT APPROACH ?

Year Cash Flow Cash Flow

0 -$140,000 -$100,000

1 60,000 30,000

2 60,000 30,000

3 60,000 30,000

4 30,000

5 30,000

6 30,000