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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: Project A Project
Perit Industries has $125,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B $125,000 Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project 0 $125,000 $ 23,000 71,000 $ 8,900 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%
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