The star co. considering two projects, A & B, with cash flows as shown below:

period CFA CFB

0 -50,000 -100,000

1 20,000 60,000

2 20,000 25,000

3 20,000 25,000

4 20,000 25,000

a. Calculate the NPV for each project

b. Which project(s) should be accepted in each of the following situations:

(1) The projects are mutually exclusive and there is no capital constraint.

(2) The projects are independent and there is no capital constraint.