Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please help! Petit Industries has $190,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: 55

Please help! image text in transcribed
image text in transcribed
image text in transcribed
Petit Industries has $190,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: 55 Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $190,000 0 $ 28,000 $ 8,900 6 years Project B $ 0 $190,000 $ 48,000 $ 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 123.1 and Exhibit 12B-2. to determine the appropriate discount factors) using lables. Required: 1. Compute the nel 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 nel 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 Which investment alternative either) would you recommend that the company accept? ULIOLE H PELALELIL I of Revenue Employment HAUCTO EXHIBIT 128-1 Present Value of $1: Periods 49 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 920952090935 0926 0917 0909 0.901 0893 0885 0877 0.870 0862 0855 08470840 0823 0826 0820 0813 OR06 000 23% 24% 25% 0.925 0.907 0.890 0.873 0857 0842 0826 0812 0.797 0783 0.769 0756 0743 0731 0718 0.706 0694 0683 0672 0661 0650 0640 0.889 0.864 0.840 0.816 0794 0712 0.751 0.731 0.712 0693 0675 0.658 0641 0624 06090593 0.579 0564 0.551 0537 0524 0512 4 0855 0823 0.792 0763 0.735 0708 0683 0659 0636 0613 0592 0572 0552 0534 0516 0499 0482 0467 0451 0437 0423 0410 0.822 0784 0.747 0713 0681 0650 0.621 0593 0567 0543 0519 0497 0476 0456 0437 0.419 0402 0.386 0.370 0.355 0341 0.328 6 0.790 0.746 0705 0.666 0.630 0596 0564 0.5350507 0480 0.456 0432 0.410 0.390 0370 0352 0.335 0319 0303 0289 0275 0262 0760 0.711 0665 0623 0583 0.547 0.513 0482 0452 0425 0.400 0.376 0354 0333 0314 0296 0279 0263 0249 0235 0 222 0.210 0731 0677 0627 0582 0540 0502 04670434 0404 0376 0351 0327 0.305 0285 0266 0249 0233 0218 0204 0191 01790168 0.703 0645 0592 0544 0500 0460 0424 0391 0361 0333 0.308 0284 0263 0243 0225 0209 0194 01800167 0155 014 0134 0676 0614 0.558 0508 0463 0422 0.386 0352 0322 0295 0270 0247 0227 020 0191 0176 01620149 0137 0126 0116 0107 0650 0585 0527 0.475 0.429 0388 03500317 0287 0261 0237 02150195 0178 0162 0148 01350123 01120103 0094 0.086 12 0625 0557 0497 0.444 0 397 0356 0319 0286 0257 0231 0208 0.187 0168 0152 0137 0124 011201020092 0083 0076 0069 0601 0530 0469 0.415 0.368 0.326 0200 0.258 0.229 0.204 0182 0163 014501300116 0104 0.093 0084 00750068 0.061 0055 14 057 0505 0442 0388 0.340 0299 0263 0232 0205 0181 01600141 01250111 0.00 OORS 0078 0069 0062 0055 0049 0044 150 555 0481 0.417 0.362 0.315 0275 0.239 0209 0183 0160 010 0123 010 0095 DOBA 0074 0065 0057 0051 0.045 0040 0035 16 0.534 0458 0394 0.339 0292 0252 021801880163 0141 0123 0107 0093 0081 007 0062 0054 0047 0012 0036 0032 0028 05130436 0371 03170270 0.231 0198 01700146 01250108 0093 000 0069 00600052 0045 0.039 0034 0030 0026 0023 18 0494 0.416 0350 0296 0.250 0212 0180 0153 0130 0111 00950081 009 0059 0.051 004 0038 0032 0028 0.024 0021 0018 0475 0.396 0331 0.277 0232 0194 0164 0138 0116 0098 0083 0.07000600051 0.0430032 0.031 0027 0023 0020 0012 0014 0456 0377 0,312 0258 02150178 0149 0124 0104 0087 0073 0061 0051 0043 00370031 0026 00220019 004 001 0012 0439 0359 0 294 02420199 0164 013501120093 007 0064 0053 0044 0037 0031 0026 0022 0.018 0015 0013 0011 0009 22 0422 0342 0278 0226 0184 0150 0123 0101 003 0.068 0056 0046 0038 0032 0.026 0.022 0018 0.015 0.013 0011 0009 0007 23 0406 0326 0262 0211 0170 013801120091 0074 0060 0.04900400,033 0,027 0022 0.01 0.0150012 0.0100009 0.007 0.006 24 0.390 0.310 0247 0197 01580126 0102 0082 0.066 0053 0043 0035 0028 0023 0.019 0015 0013 0010 0008 0.007 0006 0005 25 0375 0295 0233 0184 01460116 0.013 0010 0009 0.007 0.006 0005 0004 0092 0074 0059 0047 0038 0030 0.024 0.0200016 260361 0281 0220 0172 01350106 0084 0066 0053 0042 0033 0026_0021 0017 0014 001 0009 0.007 0006 0005 0004 0.003 27 0.347 0268 0207 0161 0125 0098 0076 0060 0047 0037 0029 0,023 0.018 0010011 0009 0.007 0.006 0.005 0004 0.003 0002 28 0313 0255 0 196 0150 0116 00900069 0054 0042 0033 002600200016 0.012 0.00 0.008 0.006 0.005 0004 0003 0.002 0.002 0.0110.008 0.006 0.005 0.004 0.003 0002 0002 0002 29 0037 0029 0022 0.01 0.01 0321 0243 0185 0141 0107 0082 0063 004 30 0308 0231 0174 013100990075 0057 0044 07033 0026 0.020 0,015 0,012 0.009 0007 0.005 0.001 0.003 0.003 0002 0002 0001 400208 0142 0097 0067 0046 0032 0022 0015 0011 0008 0.005 0004 000300020001 0001 0001 0000 0000 0000 0000 0000 EXHIBIT 120-2 Present Value of an Annuity of $1 in Arrears: 11 - 1 Periods 4 5 6 4% 6% 16 86 9% 10% 17% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0962 0952 0943 0.935 0.926 0.977 0.909 0.901 0.893 0885 0877 0870 0862 0855 0847 0 840 0833 0826 0820 0813 0806 0800 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 2775 2723 2673 2624 2577 2.531 2487 2414 2402 2361 2322 2283 2246 2210 2174 210 2106 2074 2012 2011 1981 1952 3.630 3.546 3.465 3.387 3312 3.240 3.170 3102 3037 2.974 2914 2855 2798 2743 2690 2639 2589 2540 2494 2448 2404 2362 4452 4329 4212 4100 3993 3.890 3791 3696 3605 3517 3433 3352 3274 3199 3127 3058 2.991 2926 2 864 2803 2745 2689 5242 5076 4917 4.767 4623 4486 4355 4231 4111 3.998 3.889 3784 3685 3589 3498 3410 3.326 3245 3167 3.092 3020 2951 6002 5786 5582 5.389 5206 5033 4868 4712 4564 4423 4288 4160 4039 3922 3812 3706 3605 3.508 3.416 3.327 3242 3161 6733 6.463 6.210 5.971 57475535 5335 516 4968 4799 4639 4487 4344 4207 4078 3954 3.837 3.726 3619 3.518 3421 3329 7435 7108 6.802 6.515 6.247 5995 5759 5537 5328 5132 4946 4772 4607 4451 4303 4163 4031 3905 3786 3.673 3.566 3463 8111 7722 7360 7024 6710 6.418 6145 5889 5650 5.426 5 216 5019 4833 4659 4494 4339 4192 4054 3923 3.799 3.682 3571 8760 8306 78877499 7139 6805 6.495 6 207 5.938 5687 5453 5 234 5029 4836 4656 4.486 4327 4177 4035 3902 37763656 9.385 8.863 8.384 7943 7536 7161 6.814 6.492 6194 5.918 5.660 5.421 5197 4988 4793 4611 4439 4278 41273.985 3851 3725 9.986 9394 88538358 7904 7487 7103 6.750 6.424 6.122 5842 5583 5342 5118 4910 4715 4533 4362 4203 4053 3912 3780 10563 9.899 9.295 8.745 8.244 77867362 6.982 6.628 6.302 6.002 5724 5468 5.229 5008 4802 4611 4432 4265 4108 3952 3824 11118 10 3809712 9.108 8559 8061 7606 7191 6811 6462 6142 5.847 55 5324 5092 4876 4675 4.489 43154153 4001 3859 11652 10 838 10106 9.447 8851 83137824 7379 6974 6,604 6265 5.954 5.668 5.405 5162 4938 4730 4536 4357 4189 4033 3887 12.166 11.274 10.477 9.763 9122 8.544 8022 7549 7120 6729 6.373 6047 5749 5.4755 222 4990 4775 4576 4391 4219 4059 3910 12 659 11690 10 828 10.0599372 8.756 8201 7702 7250 640 6 467 61285.818 5 534 52735033 48124608 4419 42434080 3928 13 134 12085 11158 10,336 9.604 8950 8.365 7839 7366 6938 6.550 6198 5877 5584 5.316 5.070 4843 4635 4412 4263 4097 3942 13.590 12 462 11470 10.594 9818 9129 8514 7963 7469 7025 6623 6 259 5929 5.628 5.353 5101 4870 4657 4460427941103954 14029 12 21 11764 10836 10 017 9.292 8649 8075 7562 7102 6687 6312 5.9735.665 534 5.127 4891 4675 476 4292 41213963 14451 13163 12042 11061 10 201 9442 8772 81767645 7170 6743 6.3596.011 566 5410 5.19 4909 4690 4488 4302 41303970 14857 13.489 12 303 11272 10.371 9580 8883 266 2718 7.230 6792 6,399 6044 5723 5432 5167 4925 4.703 4499 4311 4137 3.976 15 247 13799 12.550 11.469 10.529 9707 8985 8348 7784 7283 6835 6.434 6073 5746 5.451 5182 4937 4713 4507 4318 413 3.981 15 622 14.094 12.783 11654 10675 9823 9077842278437330 6873 6.454 6 0975766 5.467 51954948 4721 4514 4323 4173985 15.983 1375 13003 11826 10 810 9929 9161 HAB 7896 7372 6,906 6.491 6118 5783 5.480 5206 4956 4728 4520 4328 4151 3988 16.330 1643 13 211 1198710935 10.027 92378548 2943 7409 6.935 6514 6136 57985492 5 215 4964 4734 4524 4332 41543990 16.663 1898 13.406 12137 11051 10.116 9307 8602 7984 7441 6.961 6534 6152 5810 5.502 5 223 4970 4739 4528 4335 4157 3992 16984 15141 13.591 12278 1158 10.198 9370 650 022 74706936551 6166 58205.510 5.229 4975 4743 4531 4337 41593994 17292 15372 13765 12 409 11258 10 27 427 694 055 7496 7003 6566 617 5.829 55125.235 49794746 4534 43394160399 19.793 17159 15046 13.332 11925 10757 9779 8951 8244 7634 71056642 6 233 58715548 5 258 4997 4760 4544 4347 4166 3999

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions