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 $(182,325) Project B $(147,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 39,000 59,000 91,295 81,400 61,000 38,000 44,000 50,000 83,000 23,000 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? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value. Project A Initial Investment $ 182,325 Chart Values are Based on: Year Cash Inflow X PV Factor = Present Value Prey 1 of 1 !! Next > Required A Required B For each alternative project compute the net present value. Project A Initial Investment $ 182,325 Chart Values are Based on: Year Cash Inflow X PV Factor = Present Value Project B $ 147,960 X PV Factor - Present Value Initial Investment Year Cash Inflow 1 2 ..... .......Rossid............. Prey 1 of 1 H Next > 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 $(182,325) Project B $(147,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 39,000 59,000 91,295 81,400 61,000 38,000 44,000 50,000 83,000 23,000 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? 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 I Choose Denominator: Choose Numerator: = = Profitability Index Profitability index Project A Project B If the company can only select one project, which should it choose? Prey 1 of 1 !! Next >