Exercise 11-10 (Algo) Net present value, unequal cash flows, and profitability index LO P3 Following is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% 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.) Initial investment Project X1 $ (98,000) Project X2 $ (156,000) Net cash flows in: Year 1 34,000 73,500 Year 2 Year 3 44,500 63,500 69,500 53,500 a. Compute each project's net present value. b. Compute each project's profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 8% Present Value of Net Cash Flows Project X1 Year 1 $ 29,000 0.9259 $ 26,851 Year 2 39,500 0.8573 33,863 Year 3 64,500 x 0.7938 51,200 Totals $ 133,000 $ 111,914 Initial investment Net present $ 111,914 value Project X2 Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 8% Present Value of Net Cash Flows Project X1 Year 1 $ 29,000 0.9259 $ 26,851 Year 2 39,500 0.8573 33,863 Year 3 64,500 0.7938 51,200 Totals $ 133,000 111,914 Initial investment Net present $ 111,914 value Project X2 Year 1 $ 66,000 0.9259 $ 61,109 Year 2 56,000 0.8573 48,009 Year 3 46,000 0.7938 36,515 Totals $ 168,000 $ 145,633 Initial investment Net present $ 145,633 value < Required A Required B > Exercise 11-10 (Algo) Net present value, unequal cash flows, and profitability index LO P3 Following is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% 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.) Project X1 Initial investment $ (98,000) Project X2 $ (156,000) Net cash flows in: Year 1 34,000 73,500 Year 2 Year 3 44,500 63,500 69,500 53,500 a. Compute each project's net present value. b. Compute each project's profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute each project's profitability index. Project X1 Project X2 Numerator: Profitability Index Denominator: = Profitability Index Profitability index 0 0 < Required A Required C >