Perit Industries has $130,000 to invest. The company is trying to decide between two alternative uses of the funds. The

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Perit Industries Has 130 000 To Invest The Company Is Trying To Decide Between Two Alternative Uses Of The Funds The 1 (255.12 KiB) Viewed 30 times

Perit Industries has $130,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternative are: Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $ 130,000 $ 0 $ 21,000 $ 8,100 6 years Project B $ 0 $ 130,000 $ 65,000 $ 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 17% Click here to view Exhibit 14B-1 and Exhibit 14B-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?