Question: Can someone help me with Project B? Exercise 11-5 Net Present Value Analysis of Two Alternatives L011-2] Perit Industries has $140,000 to invest. The company
Can someone help me with Project B?
Exercise 11-5 Net Present Value Analysis of Two Alternatives L011-2] Perit Industries has $140,000 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 A $140,000 $0 $23,000 $8,500 6 years Project B $0 $140,000 $67,000 $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 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables Required: a. Calculate net present value for each project Project A Project E Net present value(54,138)E $ 380,463 $ (54,138)E S 380,463
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