Davis Corporation is faced with two independent investment opportunities. The corporation has an investment policy which requires acceptable projects to recover all costs within 3 years. The cost of capital is 10 percent. The cash flows for the two projects are:
Project A Project B
Year Cash Flow Cash Flow
0 -$120,000 -$90,000
1 42,000 30,000
2 43,000 30,000
3 44,000 30,000
4 45,000 30,000
5 46,000 30,000
What is the NPV of each investments?