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Perit Industries has $ 1 6 5 , 0 0 0 to invest. The company is trying to decide between Perit Industries has $ 1
Perit Industries has $ to invest. The company is trying to decide between Perit Industries has $ 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
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using tables.
Required:
Compute the net present value of Project AEnter negative values with a minus sign. Round your final answer to the nearest
whole dollar amount.
Compute the net present value of Project BEnter negative values with a minus sign. Round your final answer to the nearest
whole dollar amount.
Which investment alternative if either would you recommend that the company accept?two alternative uses of the funds. The alternatives are:
Project A Project B
Cost of equipment required $ $
Working capital investment required $ $
Annual cash inflows $ $
Salvage value of equipment in six years $ $
Life of the project years 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
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using tables.
Required:
Compute the net present value of Project AEnter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.
Compute the net present value of Project BEnter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.
Which investment alternative if either would you recommend that the company accept?
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