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Perrot Industries has $355,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives follow: Project B A
Perrot Industries has $355,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives follow: Project B A $355,000 $355,000 Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project 70.650 60,400 23,600 5 years 5 years The working capital needed for project B will be released at the end of five years for investment elsewhere. Perrot Industries' discount rate is 14%. Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables. Required: Calculate net present value for each project. (Negative amount should be indicated with a minus sign. Round discount factor(s) to 3 decimal places. Round other intermediate calculations and final answers to the nearest whole number.)
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