Cash flows for projects F and G are given below. Cash Flows ($) Project C0 C1 C2 C3 C4 C5 Etc. F –9,800 +6,800, +5,800, +4,800, 0, 0 ... G –9,800, +1,960, +1,960, +1,960, +1,960, +1,960, ... The cost of capital is assumed to be 10%. Assume the forecasted cash flows for projects of this type are typically overstated. That is, each $1 in forecasted cash flows for periods C1 and later should be reduced by 8 cents based on prior experience. But a lazy financial manager, unwilling to take the time to either argue with the project's sponsors or to adjust the cash flows, instructs the managers to use a discount rate of 18%.

a. What are the projects’ true NPVs? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

NPV Project F $ _________ Project G $________

b. What are the NPVs at the 18% discount rate? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

NPV Project F $ _________ Project G $___________