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

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

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Project Project Initial Investment (180,325) $(50,960) Expected net cash flows In year: .45,000 50,000 82,295 86,400 .64,000 35,000 52,000 58,000 75,000 29,000