You are evaluating projects 1 and 2. The projects have the following yearly operating profit. Depreciation expense is $2,000 per year for each project. Assume a 10% required rate of return. Project 1 Project 2 Year 1 $ 3,370 $ 8,000 Year 2 $ 3,500 $ 8,000 Year 3 $ 4,100 $ 8,000 Year 4 $ 4,270 $ 8,000 Year 5 $ 4,620 $ 8,000 Investment $ 18,000 $ 33,200 Required: A. Using Average Rate of Return, which project, if any, would you evaluate further and why? B. Using Net Present Value analysis, please answer the following questions: 1. Assuming you had $100,000 to invest, which investment would you make, if any, and why? 2. Assuming you had $35,000 to invest, which investment would you make, if any, and why? PV of Annuity of $1 PV factors are as follows: Years PV of $1 0.909 0.826 3 0.751 4 0.683 5 0.621 2. 3.791