Question: Perit Industries has $ 1 7 5 , 0 0 0 to invest. The company is trying to decide between two alternative uses of the

Perit Industries has $175,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:Perit Industries has $175,000 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 $ 175,000 $ 0
Working capital investment required $ 0 $ 175,000
Annual cash inflows $ 27,000 $ 44,000
Salvage value of equipment in six years $ 8,800 $ 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 15%.

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