Perit Industries has $180,000 to invest in one of the following two projects: The working...
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Perit Industries has $180,000 to invest in one of the following two projects: 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 and to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. Note: Enter negatlve values with a minus sign. Round your flnal answer to the nearest whole doller amount. 2. Compute the net present value of Project B. Note: Enter negatlve values with a minus sign. Round your flnal answer to the nearest whole dollar amount. 3. Which investment alternative (if either) would you recommend that the company accept? EXHIBIT 14B-1 Present Value of $1;(1+r)n1 l 14b-2 Present Value of an Annuity of \$1 in Arrears; r1[1(1+r)n1]
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Perit Industries has $180,000 to invest in one of the following two projects: 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 and to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. Note: Enter negatlve values with a minus sign. Round your flnal answer to the nearest whole doller amount. 2. Compute the net present value of Project B. Note: Enter negatlve values with a minus sign. Round your flnal answer to the nearest whole dollar amount. 3. Which investment alternative (if either) would you recommend that the company accept? EXHIBIT 14B-1 Present Value of $1;(1+r)n1 l 14b-2 Present Value of an Annuity of \$1 in Arrears; r1[1(1+r)n1] 