Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. perit industries has $140,000 to invest. the compa

Perit Industries has $140,000 to invest. The company is trying to decide between two alternative...

80.2K

Verified Solution

Question

Accounting

image

Perit Industries has $140,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are Project A Project B $140,000 Cost of equipment required Working capital investmen Annual cash inflows Salvage value of equipment in six years Life of the project equired 0 $140,000 26,000 60,000 t r 9,700 $ 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 17% Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables Required 1. Compute the net present value of Project A. (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. (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? 1. Net present value project A 2. Net present value project B Which investment alternative (if either) would you recommend that the company accept? Project B

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students