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, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(176,325) Project B $(147,960) 46,000 42,000 45,000 56,000 77,295 54,000 81,400 67,000 68,000 37,000 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 Required A B For each alternative project compute the net present value. Initial Investment Project A $176,325 Chart Values are Based on: = 8% Year Cash Inflow PV Factor Present Value 1 2 3 4 5 Initial Investment Project B $ 147,960 Year Cash Inflow PV Factor Present Value 1 2 3 4 5 < Required A Required B > 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 Numerator: 1 Choose Denominator: = Profitability Index I = Profitability index Project A Project B If the company can only select one project, which should it choose? < Required A Required B 0 0