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The Alliance For Global Education Operations And Supply Chain Management Assignment Help - Annual cash inflows


Question - Perit Industries has $100,000 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 $100,000 $0
Working capital investment required $0 $100,000
Annual cash inflows $21,000 $15,750
Salvage value of equipment in six years $8,000 $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 14%. (Ignore income taxes.)

Solve this problem using your financial calculator or Excel, NOT the tables in the chapter.



1. Calculate the NVP for project B?

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