$$TB MC Qu$.13-19($Algo$)$ Assume a company is considering buying...

Assume a company is considering buying $10,000$ units of a component part rather than making them. A supplier has agreed to sell the company $10,000$ units for a price of $$41\mathrm{.}75$ per unit. The company's accounting system reports the following costs of making the part:

$\backslash$table$[[,$Per,$10,000$ Units$],[,$Unit,per Year$],[$Direct materials,$$16,$$$160,000$

Exercise $14-7($Algo$)$ Net Present Value Analysis of Two Alternatives $[$LO$14-2]$

Perit Industries has $$220,000$ to invest in one of the following two projects:

$\backslash$table$[[,$Project,A$,$Project,B$],[$Cost of equipment required,$ $220,000,,$$$0,],[$Working capital investment required,$$0,,$$ $220,000,],[$Annual cash inflows,$ $31,000,,$$ $53,000,],[$Salvage value of equipment in six years,$ $9,200,,$$ $0,],[$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 $15\%.$

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

Compute the net present value of Project $A.$

Note: 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$.$

Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.

$3.$ Which investment alternative $($if either$)$ would you recommend that the company accept?

$\backslash$table$[[1.$ Net present value project A$,$$$(112,072),],[2.$ Net present value project B$,$$$5,52,701],[\backslash$table$[[3.$ Which investment alternative $($if either$)$ would you$],[$recommend that the company accept?$]],$Project B$,]]$

Exercise $14-7($Algo$)$ Net Present Value Analysis of Two Alternatives $[$LO$14-2]$

Perit Industries has $$220,000$ to invest in one of the following two projects:

$\backslash$table$[[,$Project,A$,$Project,B$],[$Cost of equipment required,$ $220,000,,$$$0,],[$Working capital investment required,$$0,,$$ $220,000,],[$Annual cash inflows,$ $31,000,,$$ $53,000,],[$Salvage value of equipment in six years,$ $9,200,,$$ $0,],[$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 $15\%.$

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

Compute the net present value of Project $A.$

Note: 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$.$

Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.

$3.$ Which investment alternative $($if either$)$ would you recommend that the company accept?

$\backslash$table$[[1.$ Net present value project A$,$$$(112,072),],[2.$ Net present value project B$,$$$5,52,701],[\backslash$table$[[3.$ Which investment alternative $($if either$)$ would you$],[$recommend that the company accept?$]],$Project B$,]]$