Exercise 24-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% return from its investments. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Expected net cash flows int Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(185,325) Project B $(143,960) 51,000 43,000 46,000 $1,000 89,295 52,000 78,400 81,000 68,000 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. Initial Investment Chart Values are Based on: Project A $ 165,325 For each alternative project compute the net present value. Initial Investment Project A $ 185,325 Chart Values are Based on: % Year Cash Inflow X PV Factor = 11 1 2 3 11 4 11 5 Present Value Project B 1.42 Initial Investment $ 143,960 points Year Cash Inflow x PV Factor = Present Value 1 = eBook: 2 = Hint 3 = 4 = Print References 5 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? Project A Project B Profitability Index Choose Numerator: Choose Denominator: Profitability Index 1 Profitability index 0 If the company can only select one project, which should it choose? < Required A 0