1 point: Project A net present value: $1,000
1 point: Project B net present value: –$100 + ($1,200/1.05) = $1,042.86
1 point: Project C net present value: $1,200 – ($200/1.05) = $1,009.52
1 point: Choose project B.
1 point: It has the highest net present value.