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 Project B

Cash Flow 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:	$