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EXHIBIT 7B-1 Present Value of $1;(1+r)n1 EXHIBIT 7B-2 Present Value of an Annuity of $1 in Arrears; r1[1(1+r)n1] Perit Industries has $115,000 to invest. The
EXHIBIT 7B-1 Present Value of $1;(1+r)n1 EXHIBIT 7B-2 Present Value of an Annuity of $1 in Arrears; r1[1(1+r)n1] Perit Industries has $115,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 15%. Click here to view and , to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. Note: 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. Note: 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
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