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decide between two alternative uses of the funds. The alternatives Perit Industries has $200,000 to invest. The company is trying are: Project A Project B
decide between two alternative uses of the funds. The alternatives Perit Industries has $200,000 to invest. The company is trying are: Project A Project B Cost of equipment required $ 200,000 $ Working capital investment required $ 200,000 Annual cash inflows $ 29,000 $ 51,000 Salvage value of equipment in six years $ 9,000 $ 0 Life of the project 6 years 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 14% Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.) 3. Which investment alternative (if either) would you recommend that the company accept? 1. Net present value project A 2. Net present value project B 3. Which investment alternative (if either) would you recommend that the company accept
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