Question: Exercise 14-7 (Algo) Net Present Value Analysis of Two Alternatives [LO14-2] Perit industries has $140,000 to invest. The company is trying to decide between two
Exercise 14-7 (Algo) Net Present Value Analysis of Two Alternatives [LO14-2] Perit industries has $140,000 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 eisewhere. Perit Industries' discount rate is 17%. Click here to view Exhibit 148-1 and Exhibit 148-2, 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.) nearest whole doliar amount,) (if investment alternative (f either) would you recommend that the company accept
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
