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

Required: You Must show all calculations.

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?