Question: can someone help with this problem Perit Industries has $100,000 to Invest. The company is trying to decide between two alternative uses of the funds.
Perit Industries has $100,000 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 Project B $100,000 $0 $0 $100,000 $21,000 $15.750 $8,000 $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%. (Ignore income taxes.) Solve this problem using your financial calculator or Excel, NOT the tables in the chapter. Required: (a)Calculate net present value for each project. (Negative amount should be indicated by a minus sign. Round your answer to the nearest dollar amount. Omit the "S" sign in your response.) Project A Project B Net present value $ $ Get the active (b)Which investment alternative (if either) would you recommend that the company accept? (Click to select)
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