Your manager has assigned you a task and you have to decide if 'Project A' is a good choice for the company. Your manager asked you to find the 'net change' in the company's wealth. What method and which cash flows will you use?

1. Method:Calculate WACC

   Using Expected Net Cash Flows for Project B

2. Method:Calculate NPV

   Using Expected Net Cash Flows for Project B

3. Method:Calculate WACC

   Using Expected Net Cash Flows for Project A

4. Method:Calculate NPV

   Using Expected Net Cash Flows for Project A

Time 0 1 2 Expected Net Cash Flows Project A Project B -800 -600 500 -200 200 800 200 400 -600 400 -200 400 3 4 5 Project A 11% Project B 11% WACC