Transcribed Image Text
Keller Construction is considering two new investments. ProjectE calls for the purchase of earthmoving equipment. Project Hrepresents an investment in a hydraulic lift. Keller wishes to usea 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 EProject H($45,000 Investment)($40,000 Investment)YearCash FlowYearCash Flow1$12,0001$21,000215,000218,000318,000312,000425,000a. Determine the net present value of the projectsbased on a zero percent discount rate. Project E:Project H:b. Determine the net present value of the projectsbased on a discount rate of 13 percent. (Do not roundintermediate calculations and round your answers to 2 decimalplaces.) Project E:Project H:c. If the projects are not mutually exclusive,which project(s) would you accept if the discount rate is 13percent? Project EProject HBoth H and E