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Rushforth Manufacturing has $90,000 to invest in either Project A or Project B. The following data are available on these projects:

Cost of equipment needed now: Project A-- $90,000 Project B-- $40,000

Working capital investment needed now: Project A-- $0 Project B-- $50,000

Annual cash operating inflows : Project A-- $29,000 Project B-- $25,000

Salvage value of equipment in 6 years: Project A-- $10,000 Project B-- $0

Both projects will have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Rushforth's required rate of return is 14%.

Required:

a. What is the net present value of Project A? b. What is the net present value of Project B? c. Which project should be chosen and why?