Question: 2? 30 $0 6 years Project A Project B Cost of equipment required $ 100,000 Working Capital investment required $ $ 100,000 Annual cash inflows
30 $0 6 years Project A Project B Cost of equipment required $ 100,000 Working Capital investment required $ $ 100,000 Annual cash inflows $ 21,000 $ 16,000 Salvage value of equipment in six years $ 8,000 Life of the project 6 years The working capital needed for project 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 onswer 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 2 Net present value project 3. Which investment alternative (if ther) would you recommend that the company accept? $ (14 601) $ 6.852 Project B
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