EXERCISE 2 Net Present Value Analysis of Two Alternatives Perit Industries has $100,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B Cost of equipment required . . . $100,000 $0 Working capital investment required . . . . . . . $0 $100,000 Annual cash inflows . . . . .. $21,000 $16,000 Salvage value of equipment in six years $8,000 $0 Life of the project 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%. Required: 1. Compute the net present value of Project A. 2. Compute the net present value of Project B. 3. Which investment alternative (if either) would you recommend that the company accept