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
Cost of equipment required	$	155,000			$	0
Working capital investment required	$	0			$	155,000
Annual cash inflows	$	25,000			$	57,000
Salvage value of equipment in six years	$	9,600			$	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 15%.

Required:

a. Calculate net present value for each project.

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

-	Project A
-	Project B