Rushforth Manufacturing has $90,000 to invest in either Project A or Project B. The following data are available on these projects: (Ignore income taxes.)

Both projects will have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Rushforth's required rate of return is 14%.

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Part A: The net present value of Project A is:

a. $117,341

b. $94,000

c. $27,341

d. $71,000

Part B: The net present value of Project B is:

a. $57,225

b. $7,225

c. $30,025

d. $13,350

Cost of equipment needed now Working capital investment nccdcd now........ Annual cash operating inflows Salvage value of equipment in 6 years Project A Project B $90,000 $40,000 $50,000 $29,000 $25,000 $10,000