5. Manama Manufacturing has $90,000 to invest in either Project A or Project B. The following data are available on these projects:

Project AProject B

Cost of equipment needed now$90,000$40,000

Working capital investment needed now$50,000

Annual cash operating inflows$29,000$25,000

Salvage value of equipment in 6 years$10,000

Both projects will have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Rushforth's required rate of return is 14%.

The net present value of Project B is:

Click here to viewExhibit 14B-1andExhibit 14B-2,to determine the appropriate discount factor(s) using the tables provided.

$57,225

$30,025

$7,225

$13,350