Perit Industries has $200,000 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 $ 200,000 Project B $ 0 $ 0 $ 200,000 $ 29,000 $ 9,000 $ 51,000 6 years $0 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 14B-1 and Exhibit 148-2, 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 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? Present Value of $1:1(1+r)n Periods 49 2 3 6% 7% 0.962 0.952 0943 0.935 0.925 0.907 0.890 0.873 0.889 0.864 0.840 0.816 4 5 6 0.790 0.746 0,705 7 B 9 10 11 12 13 14 15 16 17 18 0.494 0416 0.350 19 0475 0.396 0.331 0.277 20 0.456 0377 0312 0.258 0.215 21 0439 0.359 0.294 0.242 0.199 0.164 0.135 0.112 22 0422 0.342 0.278 23 0.406 0.326 0262 0.211 24 0.390 0.310 0.247 0.197 25 0.375 0.295 0.233 26 0.361 27 0.347 0.268 28 29 0.321 0.243 0.185 0.141 30 0.308 0.231 0.174 0.131 40 0.208 0.142 0.097 0.067 0.226 0.184 0.170 0.138 0.112 0.102 0.158 0.126 0.184 0.146 0.116 0.092 0074 0.135 0.106 0.084 0.066 0.281 0.220 0.172 0.076 0.060 0.125 0.098 0.207 0.161 0.090 0.069 0.054 0.116 0.333 0.255 0.196 0.150 0.107 0.082 0.063 0.048 0.099 0.075 0.057 0.044 0.046 0.032 0.022 0.015 0.150 0.123 0.101 0091 0074 0060 0.049 0082 0.066 0.053 0.043 0.059 0.047 0.038 0.033 0.053 0.042 0047 0.037 0029 0.042 0.033 0.026 0.037 0.029 0.022 0033 0.026 0.020 0.011 0.008 0.005 8% 9% 10% 11% 12% 13% 196 20% 21 %6 22% 23% 24% 2596 0.925 0.917 0.909 0.901 0.893 0885 0.877 0.870 0.862 0855 0847 0.840 0833 0826 0.820 0813 0306 0.800 0857 0842 0826 0812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0694 0683 0672 0661 0650 0640 0.794 0.772 0.751 0.731 0712 0693 0.675 0658 0641 0624 0.609 0.593 0579 0.564 0.551 0.517 0324 0512 0.855 0823 0.792 0.763 0.745 0708 0.683 0.659 0636 0.613 0.592 0572 0.552 0534 0.516 0499 0412 0467 0451 0439 0423 0410 0822 0.784 0747 0.713 0681 0650 0621 0.593 0.567 0.543 0.519 0497 0476 0.456 0437 0419 0.402 0386 0.370 0.355 0.341 0.328 0.666 0.630 0.596 0.564 0.335 0.507 0.450 0.456 0432 0410 0.300 0.370 0.352 0.335 0.319 0.303 0289 0.275 0.262 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0482 0.452 0.425 0.400 0376 0.354 0.333 0.314 0.26 0.279 0.263 0.249 0.235 0222 0210 0.731 0.677 0627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0285 0.266 0.249 0233 0218 0204 0.191 0.179 0.168 0.703 0.645 0.592 0544 0.500 0.460 0.424 0.391 0.361 0.333 0.30 0.284 0.263 0.24) 0225 0.209 0.194 0.18 0.167 0.155 0.144 0134 0.676 0614 0.558 0.508 0463 0422 0.386 0.352 0322 0.295 0.270 0.247 0.227 0208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0475 0429 0.388 0350 0.317 0.287 0.261 0.237 0215 0.195 0.178 0.162 0.145 0,135 0.12) 0.112 0.103 0.094 0086 0.625 0.557 0497 0444 0.397 0.356 0319 0.286 0.257 0.231 0208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0092 0083 0076 0.069 0.601 0.530 0.469 0415 0368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0075 0.068 0.061 0.055 0.577 0.505 0442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0099 0088 0.078 0.069 0.062 0.055 0.049 0.044 0.095 0.084 0.074 0.065 0.183 0.160 0.140 0.123 0.108 0.057 0.051 0.045 0040 0015 0.555 0.481 0417 0.362 0.315 0.275 0.239 0.209 0.028 0.165 0.141 0.123 0.107 0093 0081 0.071 0.062 0054 0.047 0.042 0.036 0032 0534 0458 0.394 0.339 0.292 0.252 0218 0.188 0.198 0.170 0.146 0.125 0.108 0093 0.080 0.069 0.060 0.513 0.436 0.371 0.317 0.270 0.231 0.052 0.045 0.039 0.034 0.030 | 0026 0.023 0.069 0.130 0.111 0.095 0.081 0.059 0.051 0021 0.018 0044 0.038 0.032 0.028 0.024 0.296 0.250 0.212 0.180 0.153 0.116 0.098 0.083 0.070 0060 0.051 0.043 0037 0031 0.027 0023 0.020 | 0017 0014 0.232 0.194 0.164 0.138 0051 0043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.093 0.053 0077 0.064 0044 0.037 0.031 0.026 0022 0.018 0.015 0.013 0.011 0.009 0.083 0.068 0.056 0.009 0.007 0.046 0038 0.032 0.026 0.022 0.018 0.015 0013 0.011 0.033 0.027 0022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 0.028 6023 0019 0015 0013 0.010 0.008 0.007 0.006 0.005 0.030 0.024 0.020 0.016 0.013 0.010 0.009 0.007 0.006 0.005 0.004 0026 0021 0017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.006 0.005 0.004 0.003 0.002 0023 0.018 0.014 0.011 0.009 0.007 0.002 0002 0.004 0.003 0.006 0.005 0020 0016 0.012 0.010 0.008 10005 0.004 0.003 0.002 0.002 0.002 0.017 0014 0.011 0.008 0.006 0.003 0.003 0.002 0.002 0.001 0.004 0015 0012 0.009 0.007 0.005 0.000 0.000 0.000 0.000 0.000 0.001 0.001 0.001 0.004 0.003 0.002 14% 15% 16% 17% 18% 0040 0035 4 dtv EXHIBIT 14B-2 Present Value of an Annuity of $1 in Arrears; Ir[1-1(1+r)n] 8% 95 10% 11% 2 3 4 3.630 3.546 3.465 5 4452 4.329 3.791 6 7 8 9 10 12 7.943 7536 13 14 15 11.118 10.380 9.712 9.108 16 11.652 10.838 10.106 9.447 17 18 8.756 8.201 19 13.134 12.085 11.158 10.336 9.604 8.950 8.365 20 13.590 12.462 11.470 10.594 9.818 9.129 8514 21 14.029 12.821 11.764 10.836 10.017 9.292 8.649 22 14.451 13.163 12.042 11.061 10.201 9.442 8.772 23 24 25 26 27 28 29 14.857 13.489 12.303 11.272 10.371 9.580 15.247 13.799 12.550 11.469 10.529 9.707 15.622 14.094 12.783 11.654 10.675 9.823 9.161 15.983 14.375 13.003 11 826 10.810 9.929 16.330 14.643 13.211 11.987 10.935 10.027 9.237 16.663 14.898 13.406 12.137 11.051 10.116 9.307 16.984 15.141 13.591 12.278 11.158 10.198 8.883 8.985 Periods 4% 55 6% 7% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0909 0.901 0.893 0885 0877 0.870 0.862 0.855 0.847 0.840 0.833 0826 0.830 0.813 0.806 0.800 1886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.605 1585 1.566 1547 1528 1509 1492 1474 1457 1440 2.775 2.723 2.673 2.624 2.577 2.531 2487 2444 2.402 2.361 2.322 2.283 2.246 2210 2.174 2.140 2.106 2074 2.042 2011 1981 1952 3.387 3.312 3.240 3.170 3.102 3037 2.974 2914 2.855 2.798 2.743 2.690 2639 2589 2.540 2.494 2448 2404 2.362 4212 4.100 3.993 3.890 3.696 3.605 3.517 3433 3.352 3.274 3.199 3.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 5.242 5.076 4.917 4.767 4.623 4.486 4355 4.231 4.111 3998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160. 4.039 3.922 3812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 6.733 6.463 6.210 5.971 5.747 5335 5.335 5.146 4.968 4.799 4.639 4.487 4344 4.207 4.078 3.954 3.837 3.726 3.619 3518 3421 3329 7435 7.108 6.802 6515 6.247 5995 5.759 5.537 5.328 5.132 4946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 8.111 7.722 7.360 7.024 6.710 6418 6.145 5.889 5650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4054 3.923 3,799 3.682 3.571 8.760 8.306 7.887 7499 7.139 6805 6.495 6.207 5.938 5.687 5.453 5234 5.029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 9.385 8.863 8.384 7.161 6814 6492 6.194 5.918 5.660 5.197 4.988 4.793 4.511 4.439 4.278 4.127 3.985 3.851 3.725 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780 10.563 9.899 9.295 8.745 8.244 7.786 7367 6.982 6.628 6302 6002 5.724 5.468 5.229 5.008 4.802 4.611 4.432 4.265 4.108 3.962 3824 8.559 8.061 7.606 7.191 6.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 4315 4.153 4.001 3.859 4033 3.887 8.313 7.824 7379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 8.851 4.189 8.022 3910 12.166 11 274 10.477 9.763 9.122 8.544 7.549 7.120 6.729 6373 6.047 5.749 5.475 5.222 4.990 4.775 4576 4.391 4.219 4.059 12.659 11.690 10.828 10.059 9.372 6840 7.702 7.250 6467 6.128 5818 5534 5.273 5033 4.812 4.608 4419 4.243 4080 3.928 5.877 7.839 7.366 6.938 6.550 6.198 5.584 5.316 5070 4.843 4.635 4.442 4.263 4097 3.942 5.628 5.353 5.101 4.870 4.657 7.963 7.469 7.025 6.623 6.259 5.929 8.075 4.675 7.562 7.102 6.687 6312 5.973 5.665 5.384 5.127 4.891 6.359 4.690 6.011 5.696 | 5410 5.149 4.909 8.176 7.645 7.170 6.743 8.266 7.718 7.230 6.792 6399 6.835 6434 8.348 7.784 7.283 5421 6.044 5.723 5432 5.167 4925 4.703 6.073 5.746 | 5.451 9.077 8422 7843 7.330 6.873 6464 6.097 6.118 5.783 5.766 5.467 5.480 30 9370 17.292 15.372 13.765 12.409 11.258 10.274 9427 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 3988 6491 4.151 8.488 7.896 7.372 6.906 8.548 7.943 7409 6.935 6514 6.136 5.798 5.492 5215 4.964 4.734 4.524 4.332 4.154 3.990 6534 6.961 8.602 7.984 7.441 4.157 3.992 6.152 5.810 5.502 5.223 4970 4.739 4.528 4335 4.975 4.743 4.531 4.337 4.159 3994 8.650 8.022 6.551 6.166 5.820 5.510 5.229 7470 6.983 8.694 8055 7.496 7.003 6.566 6.177 5.829 5517 5.235 4.979 4.746 4534 4339 4.160 3.995 4.760 4544 4347 4.166 3.999 8.951 8.244 7.634 7.105 6.642 6.233 5871 5.548 5.258 4.997 5.182 4937 4.713 4.721 5.195 4.948 5.206 4956 | 4.728 4.460 4279 4.110 3.954 4476 4.292 4.121 3.963 4488 4.302 4.130 3970 4.499 4.311 4.137 3976 4.507 4318 4.143 3.981 4.514 4323 4.147 3985 4.520 4.328