Perit Industries has $110,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

	Project A	Project B
Cost of equipment required	$110,000	$0
Working capital investment required	$0	$110,000
Annual cash inflows	$20,000	$28,000
Salvage value of equipment in six years	$8,100	$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 15%.

Required:

a. Calculate net present value for each project.

	Project A	Project B
Net present value

b. Which investment alternative (if either) would you recommend that the company accept? Project A Project B