Perit Industries has $140,000 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	$ 140,000		$ 0
Working capital investment required	$ 0		$ 140,000
Annual cash inflows	$ 23,000		$ 67,000
Salvage value of equipment in six years	$ 8,500		$ 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 17%.

Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables.

Required:

Compute the net present value of Project A.

Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.

Compute the net present value of Project B.

Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.

Which investment alternative (if either) would you recommend that the company accept?