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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 A	Project B
Cost of equipment needed now	$ 120,000	$ 70,000
Working capital investment needed now	$ 0	$ 50,000
Annual net operating cash inflows	$ 50,000	$ 45,000
Salvage value of equipment in 6 years	$ 15,000	$ 0

Click here to view 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:

▸ $77,805

▸ $127,805

▸ $55,005

▸ $105,005

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