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 Project A $210,000 Project B $ 0 $0 Salvage value of equipment in six years $ 30,000 $9,100 $210,000 $ 52,000 6 years Annual cash inflows Life of the project $ 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 15%. Click here to view Exhibit 148-1 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? EXHIBIT 148-1 Present Value of $1; 1(1+r)n Periods 4% 5% 1 0.962 0.952 0.943 6% 7% 0.935 8% 9% 10% 0.926 2 0.925 0.907 0.890 0.873 0.857 3 0.889 0.864 0.840 0.816 0.794 4 0.855 0.823 0.792 0.763 0.735 5 0.822 0.784 0.747 0.713 0.681 6 0,790 0.746 0.705 0.666 7 0.760 0.711 8 0.731 0.677 9 10 11 12 13 0.601 0.530 0.469 0415 0.368 0,326, 0.290 14 15 16 17 18 19 20 21 0456 0.377 0.312 0.439 0.359 0.294 22 0422 0342 0.278 23 0.406 0.326 0.262 24 0.390 0.310 0.247 25 26 27 28 29 30 40 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0820 0.813 0.806 0800 0.842 0.826. 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0552 0.534 0516 0.499 0.482 0.467 0451 0437 0.423 0410 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0476 0456 0.437 0419 0.402 0.386 0.370 0.355 0.341 0.328 0.630 0.596 0.564 0.535 0.507 0.480 0456 0432 0410 0.390 0.370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 0.676 0.614 0.558 0.508 0,463 0422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0475 0.429 0.388 0.350 0317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 0.625 0.557 0497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 0.555 0.481 0417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 0.534 0458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0513 0.436 0.371 0317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0045 0.039 0.034 0.030 0.026) 0.023 0494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.018 0.024 0.021 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 0.258 | 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0037 0.031 0.026 0.022 0.019 0.016 0014 0.012 0.242 0.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 | 0011 0.009 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 0.211 0.170 0.138 0.074 0.112 0.091 0060 0.049 0.040 0.033 0.027 0.022 0.006 0.018 0.015 0.012 0.010 0.009 0.007 0.197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0375 0.295 0.233 0.038 0.004 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.007 0.006 0.030 0.024 0.020 0.016 | 0.013 0.010 | 0.009 0361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0347 0.268 0.207 0.161 0.125 0.076 0.098 0.060 0.047 0.023 0.037 0.029 0.018 0.014 0.011 0.003 0.009 0.007 0.006 0.005 0.004 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.042 0.054 0.016 0.012 0.010 0.008 0.033 0.026 0.020 0.003 0.006 0.005 0.002 0.004 0321 0.243 0.185 0.141 0.107 0082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0033 0.026 0.020 0015 0012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.005 0.005 0.002 0.002 0.002 0.001 0.000 EXHIBIT 14B-2 Present Value of an Annuity of $1 in Arrears; Ir[1-1(1+r)n] Periods 4 2 3 4 5% 6% 0.943 0.962 0.952 1886 1859 1.833 2.775 2.723 2.673 2.624 3.630 3.546 3.465 7% 8% 9% 10% 14% 3.387 5 4.452 4.329 4.212 4.100 6 5.242 5.076 4.917 4.767 4.623 4486 4.355 4.231 4.111 3.998 3.889 7 6.002 5.786 5.582 5.389. 5.206 8 6.733 6.463 6.210 5.971 5.747 9 10 11 7.435 7.108 6.802) 6.515 6.247 8.111 7.722 7.360 7.024 6.710 8.760 8.306 7.887 7.499 7.139 12 9.385 8.863 8.384 7.943 7.536 13 9.986 9.394 8.853 8.358 7.904 14 15 10.563 9.899 9.295 8.745 8.244 11.118 10.380 9.712 9.108 8.559 16 11.652 10.838 10.106 9.447 8.851 17 18 19 20 21 22 23 24 25 26 27 28 30 40 19% 11% 18% 12% 13% 20% 22% 25% 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 1492 1.783 1.759 1.736 1.713 1.690 1.668 1474 1457 1.440 1.808 1.509 1.647 1.626 1.605 1585 1.566 1547 1.528 2.577 2.531 2487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2011 1.981 1952 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2448 2.404 2.362 3.993 3.890 3.791 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 3.092 3.020 2.951 3.784 3.685 3.589 3.498 3410 3326 3.245 3.167 5.033 4.868 4.712 4.564 4423 4.288 4.160 4.039 3.922 3.812 3.706 | 3.605 3.508 3416 3.327 3.242 3.161 5.535 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 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 6418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3.682 3.571 6.805 6.495 6.207 5.938 5.687 5.453 5.234 3.902 3.776 3.656 5029 4.836 4.656 4486 4.327 4.177 4.035 7.161 5.197 6814 6.492 6.194 5.918 5.660 5421 3.851 3.725 4.988 4.793 4,611 4439 4.278 4.127 3.985 4.053 3.912 3.780 7.487 7.103 6.750 6424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 7.786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.432 4.265 4.108 3.962 3.824 4.802 4.611 4.153 4.001 4.876 4.675 4489 4.315 8.061 7.606 7.191 6811 6462 6.142 5.847 5.575 5.324 5.092 4.189 4.033 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4357 8.313 7.824 7.379 6.974 6.604 6.265 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6047 4.219 4059 5.749 5.475 5.222 4.990 4.775 4.576 4.391 12.659 11 690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 6.840 6.467 6.128 4.812 4.608 4.419 4.243 4.080 5.818 5.534 5.273 5.033 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.839 7.366 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4.442 4.263 4.097 3.942 4.870 13.590 12.462 11.470 10.594 9.818) 9.129 6.259 5.929 5.628 4.279 4.110 3.954 8.514 7.963 7.469 7.025 6.623 5.353 5.101 4.657 4460 14.029 12.821 11.764 10.836 10.017 9.292 4.292 4.121 3.963 8.649 8.075 7.562 7.102 6.687 6.312 5973 5.665 5.384 5.127 4.891 4.675 4476 4.909 3.970 14.451 13.163 12.042 11.061 10.201 9.442 8.772 8.176 7.645 7.170 6.743 6.359 6.011 5.696 5410 5.149 4.690 4.488 4.302 4.130 3.976 4311 4137 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8.266 7.718 7.230 6.792 6.399 6.044 5.723 5432 5.167 4.925 4.703 4.499 15.247 13.799 12.550 11.469 10.529 9.707 5.182 4.937 4.713 6434 6.073 5.746 5451 4318 4.143 3.981 4.507 8.985 8.348 7.784 7.283 6.835 5467 5.195 15.622 14.094 12.783 11.654 10.675 9.823 9077 8.422 7.843 7.330 6.873 6.464 6.097 5.766 4.948 4.721 4514 4.520 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8.488 7.896 7.372 6.906 6.118 5.783 5480 5.206 4.956 4.728 16.330 14.643 13.211 11.987 10.935 10.027 9.237 7.943 7,409 8.548 6.514 4.734 4524 6.935 6,136 5.798 5492 5.215 4.964 5.810 5.502 5.223 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7.441 6.961 6.534 6.152 4.970 4.739 4.528 29 16.984 15.141 13.591 12.278 11.158 10.198 9370 8.650 6.551 8.022 7.470 6.983 6.166 5.820 5510 5.229 4.975 | 4.743 | 4531 4339 17.292 15.372 13.765 12.409 11 258 10.274 9427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.997 4.760 4544 4347 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7.105 6642 6.233 5.871 5.548 5.258 15% 16% 17% 21% 23% 24% 3.859 3.887 3.910 3.928 4.323 4.147 3.985 6491 4.328 4.151 3.988 4.332 4.154 | 3.990 4.335 4.157 3.992 4.337 4.159 3994 4.1603,995 4.166 3.999