Question

Perit Industries has $ 100,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:


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%.

Required:
Which investment alternative (if either) would you recommend that the company accept? Show all computations using the net present value format. Prepare separate computations for eachproject.


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  • CreatedMay 20, 2014
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