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 10% 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 $ (176,325) (150,960) ProjectB Initial investment Expected net cash flows in year: 53,000 50,000 83,295 80,400 57,000 28,000 52,000 66,000 78,000 23,000 . For each alternative project compute the net present value. . 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 For each alternative project compute the net present value. Project A Initial Investment 176,325 Chart Values are Based on: Year Cash Inflow x PV Factor = Present Value 0.9091 0.8264E 0.7513 53,000 50,000 2 3 2 103,007 3 4 4 x 0.6209 Present value of cash inflows Net present value Present value of cash outflows 103,007 176,325 66,450 Project B Initial Investment 150,960 Year Cash Inflowx PV Factor Present Value 2 4 5 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: Choose Denominator:Profitability Index Annual after-tax net income Present value of net cash flows Profitability index Project A Project B If the company can only select one project, which should it choose? oject A