Perit Industries has $210,000 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 $210, $ 0 $ 30,eee $ 9,100 6 years Project B $ $210.000 $ 52,000 $ 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% Click here to view Exhibit 123.1 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? Net present value project A 2. Net present value project B Which investment alternative (if either) would you recommend that the company accept? EXHIBIT 128-1 Present Value of $ Periods 45 5% 6% to 8% 9% 10% 11% 12% 13% 14% 15% 16% 176 85 195 205 215 225 235 1 0.962 0952 093 0935 092 091 090909010893 085 0877 0870 0852 0855 084 0800 033 0826 0820 081 0806 000 245 255 2 0925 0907 0890 0873 0857 0842 0826 080 0797 073 0769 0756 0703 0731 078 0706 0694 0683 0672 0661 0650 0640 3 0889 0854 0840 081 0794 072 07510731 0720693 0675 0658 0641 064 0609 058 059 0564 0551 053 052 050 4 0855 0823 0792 0753 0735 0708 0583 0659 0636 063 052 05120552 054 05 063 062 066 0451 032 003 000 5 0822 0784 074 073 0681 0650 0621 050 0562 053 059 0497 006 0456 0037049 0402 03 030 0.355 0.341 0328 6 0.790 0746 0705 0666 0630 056 0564 055 0507 0480 0156 042 0410 0390 0370 0352 0335 0.39 0303 0289 0275 0262 7 0760 0711 0665 0623 0583 0547 05130482 452 0425 0400 0376 0.354 02 03 0296 0279 0263 029 0235 0222 0210 8 0731 06770627 052 0540 0502 0462 0.034 0404 036 0351 0327 03050285 0266 026 0233 020204 099001790158 9 0703 0545 0592 054 0500 460 0424 0.19 0361 02 03080284 0263 020 0225 0209 0154 0180055701550 0134 10 0676 0614 0558 0508 0463 0422 0386 0352 0322 0295 020 021 0221 020 0191 0175056200013701260116 0107 11 0650 0585 0527 0475 0429 038 035003 0287 0261 0237 02 01950178 0162018 015012301120103 004 0086 12 0625 0557 0497 04440397 0.356 0319 0286 0257 0231 0208 010368 0152012101200120020092 OORT 007 0069 130601 0530 0469 04150368 0326 0290 0258 0229 0204 0182 0163010130011609040093 004 0075 006 006 0055 14 0577 0505 0442 0388 0340 0299 0263 0232 020501810160 011 01250110099 00 0078 009 0062 0055 004 004 15 0555 0481 0417 0362 0.3150275 0239 0209 0.183 0160 014001230108 0095 0084 007 0065 0057 0051 0045 0040 0035 16 0534 0458 0394 039 0292 0252 021801880163 0110123 0907 0093 008 007 0062 0054 0047 00420036 002 0028 17 05130436 037 03170270 0231 0198 0170 016 0125 0108 0093 000 006900600052 0065 0039 0036 0030 0026 0023 18 049404160350 0296 0 250 0212 01800153 0130 01 0095 008 0069 0059 0051004 0038 00320028 00240021 0018 190475 0396 0331 0277 0232 0194 0164 01380116 009 008 007 00600051 00430037 0031 0021 0023 0020 00100M 200456 0377 0312 0258 02150178 0149 0124 0104 007 0073 006 005 004 0037 0031 0026 0022 0019 005 004 001 21 0439 0.359 0294 0242 0199 0164 01350120093 007 0064 005 004 003 003 0026 0022 003 004 000 con 0009 22 0422 0342 0278 0226 0184 0150012301010083 0068 0056 004 003 002 0026 0022 000 00150013 con 0009 0007 0006 23 0.406 0326 0262 0211 01700138 01120091 004 0060 0049 0000 0000 0027 0022 001 0015 001 0010 0000 000 24 0.30 0.310 0247 0197 0154 0126 0102 00R2 0066 0053 000 0005 0028 0023 001 0015 000 000 000 000 0005 0005 25 0375 0295 02330184 01460116 009 007 0059 004 003 00300024 0020 004 000 000 000 000 000 000 0004 26 0.361 0281 0220 0172 013501060084 0066 0053 0002 003 0026 0021 0010010010009 0002 0006 0005 0004 0003 27 0347 0268 0207 0161 0125 0098 007 0060 0047 0037 0.029 0023 0010010010009 0007 0006 0005 0004 0003 0002 28 0333 0255 0196 0150 0116 0090 0069 0054 0042 007 0026 0020 004 0012 0010 0008 0006 0005 0004 0000 0002 0.002 290321 0243 018501410107 OORZ 0063 0048 0037 0029 0022 00100100110008 0006 0005 0000 0000 000 0002 0002 300308 0231 0174 0131009 0075 0052 004 0033 0025 0.020 00150012 0009 00070005 0004 0000 0000 0002 0002 0.001 400208 0142 0097 0067 004 00320022 0.015 000 000 000 0004 0003 0002 0001 000 000 0000 0000 0000 0000 0000 18 AM TAVO EXHIBIT 120-2 Present Value of an Annuity of $1 in Arrears! (- Periods 4% 5% 6% 7 8% 9% 10% 11% 12% 13% 9% 15% 16% 17% 18% 19% 20% 21% 22% 23% 245 255 0.962 0952 0943 0935 0.926 0917 0.909 0 901 0893 0885 0.8770870 0862 0855 0847 0840 0833 0826 0820 081 0806 0.800 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1.440 3 2775 2723 2673 2624 2577 2531 2487 2444 2402 2361 2322 2283 2246 2210 2114 2140 2106 2074 2012 2011 1981 1952 4 3630 354634653387 3312 32403170 3102 3037 2974 291 2855 2798 2743 2690 2639 2589 2540 2494 248 2404 2352 5 4452 43294212 4100 3.9933890 3791 3696 3605 3517 3433 3352 3274 3199 3127 3058 2991 2926 2854 2803 2765 2589 6 5242 5076 491 4767 4623 4486 4355 4231 4111 3998 389 3784 3685 3589 398 3410 3326 3245 3157 3092 3020 2951 7 6.002 5786 5582 5389 5.206 5033 4868 47124564 4423 4288 4550 4039 3.922 3812 37063.6053508 3.416 3327 3242 3161 8 6733 6.463 6210 5971 5747 5535 5335 5146.4968 4799 4639 4487 4344 4207 4078 3954 3837 3726 3619 3518 3421 3.329 9 7435 7108 6802 6515 6 247 5995 5759 5537 5328 5132 4946 4772 4607 4451 4303 4163 40313905 378636733566 3.463 10 8111 772273607024 6710 6418 615 5889 5650 5.426 5215 5019 4833 4659 4494 4339 4192 4054 3.923 3 799 3682 3.571 11 8760 830678877499 2139 6805 6.495 6 207 5938 5687 5453 5 234 5029 4836 4656 4.186 4327 417 4035 3902 37763656 12 9385 8863 8384 7943 7536 7161 6814 6.492 6194 5918 5660 5.421 5197 4988 4793 4611 4439 4278 427 3985 3851 3725 139986 9394 8.8538358 7904 7487 2103 6750 6424 6.122 5.842 5583 5342 5118 4910 475 4533 4362 4203 405339123780 14 10563 9899 9.295 8745 8.244 7786 7367 6.982 6628 5302 6002 5724 5468 5229 5008 4802 4611 4432 4265 4108 3962 3824 1511118 103809712 9108 8559 8061 7606 7191 6811 6.462 614258475575 5324 5092 4876 4675 4489 431541534001 3859 16 11652 10838 101069447885183137824 7379 6974 6604 6265 5.954 5668 5405 5162 4938 4730 4536 4357 41894033 3887 17 12 166 1127410477 9763 91228544 8022 7519 7120 6729 6373 6047 57495475 5222 4990 47754575 439142194059 3910 18 2659 11690 10828 100599372 8756 8201 77027250 6840 6 467 6128 5818 5534 5273 5033 48124608 4419 4243 4080 3.928 1913134 12.085 11158 10336 9.604 8950 8365 78397366 6.938 6.550 6198 5877 5584 5316 5070 4843 4635 4442 4263 4097 3942 20 13.590 12.462 11470105949.818 9129 8514 7963 7469 7025 6623 6 259 5.929 5.628 5353 5101 4870 4657 4.460 4279 410 3.954 21 14029 2821 11764 10.836 10 017 9292 8649 80757562 7102 6687 6312 5.973 5665 5384 5127 4891 4675 4476 4292 4121 3963 22 651 3.163 12042 11061 10 201 9442 8772 81767645 7170 673 6359 60115696 5410 5149 4909 4690 4488 4302 41303970 23 14857 1489 12 303 11272 10371 9580 8.883 8266 7718 7230 6792 6 399 6044 5723 5.432 5167 4925 4703 4499 4311 437 3.976 24 15 247 3799 12.550 11469 10.529 9707 8.985 8348 7784 7283 6835 634 6073 5745 5.451 5182 4937 471 4507 4318 433981 25 15.622 1094 12783 11654 10675 98239077842278437330 6873 6464 6097 5766 5467 51954948 4721 4514 4323 417 3.985 26 15983 1375 13.003 11826 10810 9 929 9161 8.488 7896 7372 6.906 6.491 6.118 578354805 206 4956 4728 4520 4328 4151 3988 27 16330 14.643 13.211 11987 1093510027 9.237 8.548 7943 7409 6935 6514 6.136 57985492 52154964 4734 4524 4332 41543990 28 16663 1898 13 606 2137 1105110116 9307 8602 7984 7441 6.961 6534 6152 5810 5502 5223 4970 47394528 4335 4157 3992 29 16984 15.141 13.591 2278 11158 0198 9370 8650 8022 7470 6.983 6551 6166 5820 5510 5229 4975 473 4531 433741593994 30 17292 15372 13765 12.409 11258102749.427 8694 8055 7496 7003 6566 617 5829 5511 5235 4979 475 4534 4339 4160 3.995 40 197931715915046 1333211925 10757 9779 8951 824 763471056642 6 233 587 5548 5258 4997 4760 4544 4347 4166 3999
