Question 7: (15 points) (Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:

Year	Project A Cash Flow	Project B Cash Flow
0	$(110,000)	$(110,000)
1	30,000	0
2	30,000	0
3	30,000	0
4	30,000	0
5	30,000	210,000

If the appropriate discount rate on these projects is 11 percent, which would be chosen and why? (Round to the nearest cent.)

a. The NPV of Project A is:	$
b. The NPV of Project B is:	$

Which project would be chosen and why? (Select the best choice below.)

a. Cannor choose without comparing their IRRs.

b. Choose A because its NPV is higher.

c. Choose both because they both have positive NPVs.

d. Choose B because its NPV is higher.

Answer: