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Haas Trucking Company founded in 1985 provides safe and dependable freight services. Haas has $155,000 to invest in one of the two projects listed below.
Haas Trucking Company founded in 1985 provides safe and dependable freight services. Haas has $155,000 to invest in one of the two projects listed below. Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $ 155,000 $ 0 $ 20,000 $ 9,400 6 years Project B $ 0 $ 155,000 $ 55,000 $ 0 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. The company's discount rate is 14%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. (Enter negative value 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 value 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 Which investment alternative (if either) would you 3. recommend that the company accept
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