Exercise 11-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% 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 A $(174,325) Project B $(157,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 50,000 49,000 80,295 88,400 70,000 27,000 58,000 52,000 74,000 25,000 a. For each alternative project compute the net present value. b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Required A Required B For each alternative project compute the net present value. Project A Initial Investment $ 174,325 Chart Values are Based on: % Year Cash Inflow PV Factor Present Value 1 2 = 3 4. 5 Project B 157 960 Initial Investment $ Initial Investment $ Project B 157,960 PV Factor Year Cash Inflow Present Value 1 2 = 3 = 4 5 Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Profitability Index Choose Denominator: Choose Numerator: Profitability Index Profitability index = Project A Project B If the company can only select one project, which should it choose?