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Perit Industries has $125,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: CostofequipmentrequiredWorkingcapitalinvestmentrequiredAnnualcashinflowsSalvagevalueofequipmentinsixyearsLifeoftheproject$125,000$0$20,000$8,0006years$0$125,000$64,000$0 The working

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Perit Industries has $125,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: CostofequipmentrequiredWorkingcapitalinvestmentrequiredAnnualcashinflowsSalvagevalueofequipmentinsixyearsLifeoftheproject$125,000$0$20,000$8,0006years$0$125,000$64,000$0 The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 17%. 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 values 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 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? \begin{tabular}{|l|l|} \hline 1. Net present value project A \\ \hline 2. Net present value project B & \\ \hline 3. Which investment alternative (if either) would you recommend that the company accept? \\ \hline \end{tabular} EXHIBIT 12B-1 Present Value of S1: ((1+t))21 I 12 12B-2 Present Value of an Annuity of $1 in Arrears; 1/r(1(1/(1+r)n))

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