Computing net present value. Hammersmith Homes is considering four possible housing development projects, each requiring an initial investment of $5,000,000. The cash inflows from each of the projects...

Computing net present value. Hammersmith Homes is considering four possible housing development projects, each requiring an initial investment of $5,000,000. The cash inflows from each of the projects follow:

a. Compute the net present value of each of the projects. Hammersmith’s cost of capital is 15 percent.

b. Hammersmith can take on only one project; which should it choose? Explain why this project is superior to the others.