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Perit Industries has $155,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project

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Perit Industries has $155,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B $0 SO $155,000 $25,000 $40,000 $0 9 years Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project $155,000 $8,600 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Pent Industries' discount rate is 14%. Click here to view Exhibit 11B-1 and Exhibit 118-2, to determine the appropriate discount factor(s) using tables Required a. Calculate net present value for each project. Project A Project B Net present value b. Which investment alternative (if either) would you recommend that the company accept? O Project A OProject B

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