1.

Rowan Company is considering two alternative investment projects. Each requires a $250,000 initial investment. Project A is expected to generate net cash ows of $60,000 per year over the next six years. Project 3 is expected to generate net cash flows of $50,000 per year over the next seven years. Management requires an 3% rate of return on its investments. (PV of $1, F'vr of $1, P'v'. of $1, and Firm of $1] (Use appropriate factorial from the tables provided.) Required: 1. Compute each project's net present value. 2. Compute each project's profitability index. 3. If the company can choose only one project, which should it chooser based on profitability index? a Answer is complete but not entirely oorrect. Complete lis queslion by entering your answers in le tabs bebw. Requiredl ! Required2 E Required3 Compute each project's protability index. [Do not round intermediate values. Enter your answers rounded to the nearest whole dollar.) _ Presentvalue of net cash ows 9 Initial investment 0 I ProtabilityI index #1. shoe manufacturer is evaluating new equipment that would custom t athletic shoes. The new equipment costs $90,000 and Iwill generate $35,000 in net cash ows for five years. (Negative cumulative cash ows should be indicated with a minus sign.} Determine the break-even time for this equipment. Initial investment 5 (90,000}: 1.0000 0 {90,000} 0 {90,000} team 35.0%\" 0-9091 _ _e .= mmla