Perit Industries has $155,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Cost of equipment required Working capital investment required Annual cash inflows. Salvage value of equipment in six years Life of the project Project A $ 155,000 Project B $ 0 $ 0 $ 155,000 $ 20,000 $ 9,400 $ 55,000 6 years 30 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 14%. 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 min. sign. Round your final answer to the nearest whole dollar amount.) 3. Which investment alternative (if either) would you recommend that the company accept? 1. Net present value project A 2. Net present value project B 3. Which investment alternative (if either) would you recommend that the company accept? EXHIBIT 12B-1 Present Value of $1. - 1 (1+r)" Periods 4% 59 656 796 1 0.962 0.952 0.943 0.935 0.926 2 0.925 0.907 0.890 0.873 0.857 3 0.889 0.864 0.840 0.816 0794 0.675 4 0.855 0.823 0.792 S 0.822 0.784 0.747 6 0.790 7 0.760 0.746 0.711 0.705 0.665 0.623 0.763 0.735 0.713 0.681 0.666 0.630 0.583 8 0.582 0.540 9 0.500 10 11 0.650 12 0.625 13 0601 14 0.577 15 0.555 16 0.534 0.458 0.394 17 18 19 20 21 22 23 24 25 26 27 28 0.347 0.268 0207 0.161 0.333 0.255 0.196 0.150 29 30 0.321 0.243 0.185 0.141 0.308 0.231 0.174 0.131 40 0.208 0.142 0.097 0.067 8% 9% 10% 11% 12% 13% 14% 15% 16% 20% 21% 0.917 22% 23% 0.909 0.901 24% 0.893 28% 0.885 0.877 0.870 0.862 0.855 0.840 0813 0.836 0.830 0.813 0.806 0.300 0842 0.826 0812 0.797 0.783 0.769 0756 0743 0.731 0.718 0.706 0.694 0.683 0.672 0661 0.772 0.751 0,650 0.640 0.731 0.712 0693 0658 0.641 0.624 0609 0.593 0579 0.564 0.551 0.537 0.708 0.683 0.659 0.636 0.613 0.592 0572 0552 0534 0.516 0499 0482 0467 0.451 0.437 0423 0.650 0621 0.410 0.593 0.567 0543 0.519 0497 0.476 0456 0.437 0419 0402 0386 0.370 0.355 0341 0.328 0.596 0.564 0335 0.507 0.450 0.456 0.432 0.410 0.390 0.370 0.352 0335 0.319 0303 0289 0.275 0.262 0.547 0.513 0.482 0452 0.425 0.400 0376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.731 0.677 0.627 0.235 0222 0.502 0.467 0.210 0434 0404 0.376 0351 0.327 0.305 0.285 0266 0249 0.703 0.645 0233 0.592 0.544 0460 0.424 0.391 0.361 0333 0.308 0.284 0.263 0.243 0.225 0.209 0194 0180 0.676 0.614 0.558 0.508 0.463 0422 0.386 0.352 0322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0126 0.585 0.527 0475 0429 0.388 0350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.145 0.135 0.123 0.112 0103 0.094 0086 0.557 0.497 0444 0.397 0356 0319 0286 0257 0231 0208 0.157 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0083 0076 0.069 0530 0469 0415 0.368 0.326 0.290 0.258 0229 0204 0.182 03 0.145 0.1301 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0.505 0442 0.388 0.340 0299 0.263 0232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0078 0.069 0.062 0.055 0.049 0.044 0.481 0417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 0.339 0.292 0.252 0.218 0.188 0163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.106 0.093 0.050 0.069 0.060 0.052 0.045 0.019 0.034 0.030 0.026 0.023 0494 0416 0.350 0.296 0250 0.212 0.180 0153 0.130 0.111 0.095 0.081 0.069 0059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 0475 0.396 0331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0070 0.060 0051 0043 0.037 0.031 0027 0.023 0.020 0.017 0.014) 0.456 0.377 0312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 0.439 0.359 0.294 0.242 0.199 0.164 0.135 0.112 0093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.422 0.342 0.278 0226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0038 0032 0.026 0.022 0.018 0015 0.013 0.011 0.009 0.007 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0060 0.049 0040 0.033 0.027 0022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0053 0.043 0035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 009 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0010 0.009 0.007 0.006 0.005 0.004 0.361 0.281 0.220 0.172 0.135 0.106 0084 0.066 0.053 0042 0.033 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.125 0,098 0.076 0.060 0.047 0037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.107 0.082 0063 0.048 0037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0015 0012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 0.046 0.032 0.022 0.015 0.011 0.005 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 1796 18% 19% 0847 0.5240512 0218 0.204 0.191 0.179 0.168 0.167 0.155 0.144 0.134 0.116 0.107 EXHIBIT 128-2 Present Value of an Annuity of 51 in Arrears, 11-(1/(1+r)^n))) Periods 1 4% 0.962 5% 6% 0.952 0.943 7% 8% 2 0935 0.926 1.886 1.859 1833 1.808 9% 0.917 1.783 1.759 3 2.775 2.723 2.673 2.624 2.577 2.531 11% 10% 0909 0.901 1.736 1.713 2487 2444 4 3.630 3.546 5 3.465 3.387 4.452 4.329 4212 4.100 3312 3.240 3.993 3.890 6 5.242 7 6.002 5.076 4.917 5.786 5.582 4.767 4.623 4486 3.170 3.102 3.791 3.696 4231 4.355 12% 0893 1.690 2.402 3.037 3.605 4.111 5.389 8 5.733 6463 6.210 5.971 9 10 8.111 7435 7.108 6.802 7.722 11 8.760 8.306 12 13 9.986 14 15 11.118 10.380 9.712 9.108 8.559 5.206 5.033 5.747 5.535 6515 6.247 5.995 5.759 5.537 7.360 7.024 6418 6.710 6.145 5.889 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 9.385 8863 8.384 7.943 7.536 6.194 3.918 7.161 6.814 6.492 9.394 8.853 8.358 7.904 6.750 6424 6.122 7487 7.103 10.563 9899 9.295 8.745 8.244 7.786 7367 6.982 6.628 6.302 6811 6462 7.191 4.868 4.712 4.564 4.423 4.288 5.335 5.146 4.968 4.799 4.639 5.328 5.132 4946 4.772 5.650 5.426 5.216 5.019 16 11.652 10.838 10.106 9.447 8.851 8.061 8.313 7.824 7.606 7379 6974 6604 6.265 5.954 17 12.166 11 274 10.477 9.763 9.122 8.544 8022 7549 7.120 6.729 6.373 6047 18 12.659 11.690 10.828 10 059 9.372 8.756 8.201 7.702 7250 6.840 19 13.134 12 085 11 158 10 336 9604 8.950 8.365 7.839 2.366 6938 6.467 6.128 6.198 6.550 20 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7469 7025 6.623 21 14.029 12.821 11.764 10.836 10 017 9.292 8.649 8.075 7.562 7.102 6.687 6312 5973 5.384 21% 23% 22% 19% 20% 14% 13% 15% 17% 16% 18% 0.826 0820 | 0.813 0.806 0.885 0877 0.870 0.862 0.855 0.847 0.840 0833 1440 1.668 1647 1626 1.566 1605 1.585 1.547 1.528 1.509 1492 1.474 145 2.042 2011 1981 1952 2.140 2.106 2.074 2.361 2.322 2.283 2.246 2.210 2.174 2.448 2.540 2.494 2404 2.362 2.974 2914 2.855 2.798 2.743 2.690 2.639 2.589 2.926 2864 2.803 2.745 2.689 3517 3.433 3.274 3.199 3127 3.058 2991 3.352 3.245 3.167 3.498 3.410 3326 1.998 3 889 3.784 3.685 3.589 4.160 4.039 3.922 3.812 3.605 3.706 3.508 3.416 3.726 3.619 3518 4078 3.954 3.837 4344 4.207 4487 4031 3.786 3:566 4.303 3.905 3.673 4.607 4.163 4451 4833 4.659 4494 4.192 4.339 4054 3.923 3.799 3.682 3571 4327 4177 4035 3.902 3.776 3.656 5.029 4.836 4656 4.486 5.453 5234 4439 4.278 4.127 3.985 4988 4.793 4611 3.851 3.725 5.660 5.421 5.197 4.053 3912 3.780 5.842 5.583 5.342 5.118 4910 4715 4.533 4.362 4.203 4802 5229 5.008 4.611 4432 4265 6.002 5.724 5.468 4.675 44894.315 5.575 5.324 5.092 4.876 6.142 5847 5.665 5405 5.162 4.938 4.730 4536 4357 4.576 4391 4219 5.749 5.475 5222 4.990 4775 4.608 4419 4.243 5.818 5.033 4812 5534 5273 4.843 4635 5.070 5.877 5.585.316 5628 5353 5.929 6259 5.665 24% 25% 0300 3.092 3.020 2.951 3.327 3242 3.161 3.421 3.329 3.463 4.108 3.962 3.824 4.153 4.001 3859 4 189 4.033 3.887 4.059 3.910 4050 3.928 4.442 4.263 4097 3.942 5.101 4.870 4.657 4279 4.460 4.110 3.954 5.127 4.391 4675 4476 4.292 4121 3.963 22 14.451 13.163 12.042 11.061 10.201 9442 8.772 8.176 7645 7.170 6.743 6.359 6.011 5.696 5.410 5.149 4.909 4.690 4488 4.302 4.130 3.970 23 14.857 13.489 12.303 11.272 10.371 9.580 8883 8266 7.718 7.230 6.792 6.399 6044 5.723 5412 5.167 4925 4.703 4.499 4311 4.137 3.976 24 15.247 13.799 12.550 11.469 10 529 9.707 8085 8348 7.784 7283 6434 25 15.622 14.094 12.783 11.654 10 675 9.823 9077 8422 26 15.983 14.375 13.003 11 826 10 810 9929 9.161 27 16.330 14.643 13.211 11.987 10 935 10.027 9.237 28 16 663 14.898 13.406 12.137 11 051 29 16.984 15.141 13 591 12.278 11.158 30 40 17.292 15.372 13 765 19.793 17.159 15.046 10.116 9.307 10.198 9.370 12 409 11.258 10.274 9427 13.332 11 925 10.757 9.779 6073 5.746 5451 5.182 4937 4713 6835 5.195 4514 4.323 4.147 4.721 6873 6464 6097 5.766 5.467 7.843 7.330 4.728 4.520 4.328 4.151 5.206 4956 8.485 7.896 7372 6906 6118 5.783 5.480 6.491 4.332 4.154 4.964 4.734 4524 8.548 7.943 7.409 6.935 6.314 6.136 5.798 5.492 5.215 5.500 5.223 4970 5.810 8.602 7.954 7.441 6961 6534 6152 5510 4.975 5820 5.229 8650 8.022 7.470 6983 6.551 6166 5.235 4979 8.694 8055 6.566 6.177 5.829 5.517 7496 7.003 8.951 8.244 7.634 7.105 6.642 6233 5871 5.545 5.258 4.997 4.318 4507 4.143 3.981 4.948 3.985 3.988 3.990 4.739 4.528 4.335 4.157 4.743 4337 4.760 4.544 4.347 3.992 4159 3994 4.531 4.746 4534 4.339 4160 3.995 4166 1.999