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szto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchuri=https%25 62F%252Fims.mhed Seved Perit Industries has $120,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

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szto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchuri=https%25 62F%252Fims.mhed Seved Perit Industries has $120,000 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 Project $120,000 $0 $o $120,000 $ 22,000 $ 70,000 $ 3,800 $ 0 6 years 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 14% Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factors) 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 2 Net present value project A Net present value project B Which investment alternativa (if other) would you recommend that the company accept? 3

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