Question 1: Consider the following two streams of cash flows for projects A and B.

Project A:

Year	0	1	2
Costs	2000	1500	500
Benefits		3000	2000

Project B:

Year	0	1	2
Costs	2000	500	500
Benefits		1500	1500

(a) What are the break-even periods for the two periods (without discounting)?

(b) Which project will you select based on break-even period?

c) Calculate NPVs for the two projects assuming that the discount rate is 10%?

(d) Which project will you select based on NPV?