6 Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 10% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) 2 points Initial investment Net cash flows in: Project X1 $ (124,000) Project x2 $ (191,000) Year 1 Year 2 Year 3 47,000 57,500 82,500 93,000 83,000 73,000 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose on the basis of profitability index? Required A Required B Compute each project's net present value. (Round your answers to the nearest whole dollar.) Net Cash Flows Present Value of 1 at 10% Present Value of Net Cash Flows Project X1 Year 1 Year 2 0.9091 $ 0.8264 $ 47,000 57,500 82,500 $ 187,000 42,727 47,521 X 61,983 Year 3 0.7513 $ 152,231 (124,000) Totals Initial investment Net present value Project X2 Year 1 $ 28,231 0.9091 $ Year 2 0.8264 $ 93,000 83,000 73,000 $ 249,000 84,545 68,595 X 54,846 207,986 Year 3 0.7513 $ Totals Initial investment Net present value (191,000) 16,986 Required A Required B Compute each project's profitability index. If the company can choose only one project, which should it choose on the basis of profitability index? Profitability Index Numerator: Denominator: Present value of net cash flows Initial investment Profitability index 1.23 Project X1 S 152,231 X $ 124,000 Project X2 $ 207,986 X $ 191,000 If the company can choose only one project, which should it choose on the basis of profitability index? 1.09 Project X1