Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these projects (Ignore income taxes.): Project AProject BCost of equipment needed now$120,000 $70,000 Working capital investment needed now - $50,000 Annual net operating cash inflows$50,000 $45,000 Salvage value of equipment in 6 years$15,000 - Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Both projects have a useful life of 6 years. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's discount rate is 14%.The net present value of Project B is closest to:
A. $127,805
B. $105,005
C. $77,805
D. $55,005
Answer: C
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