Perit Industries has $140,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

Project AProject BCost of equipment required$140,000$0Working capital investment required$0$140,000Annual cash inflows$23,000$35,000Salvage value of equipment in six years$8,400$0Life of the project6 years6 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%.

a.Calculate net present value for each project