Lambert Manufacturing has $100,000 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$100,000 $60,000 Working capital investment needed now - $40,000 Annual cash operating inflows$40,000 $35,000 Salvage value of equipment in 6 years$10,000 - Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Both projects will have a useful life of 6 years and the total cost approach to net present value analysis. At the end of 6 years, the working capital investment will be released for use elsewhere. Lambert's required rate of return is 14%.The net present value of Project A is:
A. $94,450
B. $60,120
C. $51,000
D. $55,560
Answer: B
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