principles of account ii 495348

Principles of Account II 1. Sharp Company has $18,000 to invest. The company is trying to decide between two alternative uses of the funds as follows: Invest in Invest in Project A Project B Investment required $ 18,000 $ 18,000 Annual cash inflows $ 6,500 $ 0 Single cash inflow at the end of 12 years $ 68,000 Life of the project 12 years 12 years Sharp Company uses a 17% discount rate. (Ignore income taxes.) Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: Determine the net present value. (Negative amounts should be indicated by a minus sign. Round discount a. factor(s) to 3 decimal places, other intermediate calculations and final answers to the nearest whole dollar.) Net Present Value Project A $ Project B $ b. Which investment would you recommend that the company accept? Project A Project B 2. Wriston Company has $300,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are as follows: A B Cost of equipment required $ 300,000 $ 0 Working capital investment required $ 0 $ 300,000 Annual cash inflows $ 56,000 $ 48,000 Salvage value of equipment in nine years $ 14,000 $ 0 Life of the project 9 years 9 years The working capital needed for project B will be released for investment elsewhere at the end of nine years. Wriston Company uses a 10% discount rate. (Ignore income taxes.) Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: a. Calculate net present value for each project. (Negative amounts should be indicated by a minus sign.Leave no cells blank – be certain to enter “0” wherever required. Round discount factor(s) to 3…