Perit industries has $100,000. The company is trying to decide between two alternatives uses of the fund. The alternatives are:

	project A	project B
Cost of equipment required	$100,000	$0
working capital investment required	$0	$100,000
annual cash inflows	$21,000	$16,000
salvage value of equipment in 6 years	$8,000	$0
life of the project	6 years	6 years

The working capital needed for project B will be released at the end of 6 years for investment elsewhere. Perit industries' discount rate is 14%

required:

1. compute the net present value of project A.

2. compute the net present value for project B

3. which investment alternative (if either) would you recommend that the company accept?