Question: tal Budgeting Decisions Saved Help Save & E Che Exercise 14-7 (Algo) Net Present Value Analysis of Two Alternatives (L014-2] Perit Industries has $125,000 to
tal Budgeting Decisions Saved Help Save & E Che Exercise 14-7 (Algo) Net Present Value Analysis of Two Alternatives (L014-2] Perit Industries has $125,000 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 intlows Salvage value of equipment in six years Life of the project Project Project B $125,000 $ 6 $0 $125,000 $ 23,000 $ 71,000 $ 8,900 $ O 6 years 6 years The working capital needed for project will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 15% Click here to view Ext. 14B-1 and Exhibit/48-2. to determine the appropriate discount factor(s) using tables. Required: Compute the net present value of Project A (Enter negative values with a minus sign. Round your final answer to the nearest 2. Compute the net present value of Project 8 (Enter negative values with a minus sign. Round your final answer to the nearest 3. Which investment alternative of either) would you recommend that the company accept? whole dollar amount.) whole dollar amount) 1 Net present al project 2 Net procent value project 3 Which investment alternative either would you recommend that the company accept
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