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8. Keller Construction is considering two new investments.Project E calls for the purchase of earthmoving equipment. ProjectH represents an investment in a hydraulic lift. Keller wishes touse a net present value profile in comparing the projects. Theinvestment and cash flow patterns are as follows: Use Appendix Bfor an approximate answer but calculate your final answer using theformula and financial calculator methods.

Project E					Project H
($33,000 Investment)					($33,000 Investment)
Year	Cash Flow				Year	Cash Flow
1	$	8,000			1	$	15,000
2		11,000			2		17,000
3		17,000			3		16,000
4		19,000

a. Determine the net present value of the projectsbased on a zero percent discount rate.

b.Determine the netpresent value of the projects based on a discount rate of 12percent. (Do not round intermediate calculations and roundyour answers to 2 decimal places.)

	Project E Project H

15.Myers Business Systems is evaluating the introduction of anew product. The possible levels of unit sales and theprobabilities of their occurrence are given next:

  

Possible Market Reaction	Sales in Units			Probabilities
Lowresponse		10			.20
Moderateresponse		50			.30
Highresponse		70			.40
Very highresponse		90			.10

a. What is the expected value of unit sales forthe new product? (Do not round intermediate calculationsand round your answer to the nearest whole unit.)

b.What is the standard deviation of unit sales? (Do notround intermediate calculations. Round your answer to 2 decimalplaces.)