Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return from its investments.

For each alternative project compute the
(a) Net present value,
(b) Profitability index.
If the company can only select one project, which should it choose?Explain.

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ProjectA Project B Inital investment... $(60.000) $(105,000) Expected net cash flows in year: 40,000 56.000 80,295 90.400 65,000 32.000 50,000 66,000 72,000 24,000