Your company is considering two projects and has estimated the following cash flows:

year project A project B

0 -15,000 -20,000

1 10,000 10,000

2 10,000 17,000

a.If project B expands your manufacturing capacity by building a separate factory, what is the relevant cash flow for evaluating project B in year 2?

b. If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 2?

c. If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 0?