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Perit Industries has $165,000 to Invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Cost of equipment
Perit Industries has $165,000 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 Project B $165, eee $ $ B $ 165,000 $ 21, see $ 56, see $ 9,500 $ 2 6 years 6 years The working capital needed for project 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 value 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 value with a minus 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
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