Vary Company is considering two investment projects with cash flows as described below:

Project A: Cash investment now

$11,000

Cash outflow for 5 years

$3,000

Addition cash inflow at the end of 5 years

$21,000

Project B: Cash investment now

$21,000

Cash inflow at the end of 4 years

$11,000

Cash outflow for 3 years

$5,000

Addition cash inflow at the end of 4 years

$15,000

a. Calculate the net present value for project A. Monson Company uses a 12% discount rate.

b. Calculate the net present value for project B. Monson Company uses a 12% discount rate.

c. Which project should the company accept and why?