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 6% 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 $(175, 325) Project B $ (153,960) Initial investment Expected net cash flows in year: UWNE 36,000 54,000 79,295 79,400 62,000 29,000 58,000 57,000 78,000 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? 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 - I ----- Project A $ 175,325 -- --- 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 $ 175,325 Chart Values are Based on: Year Cash Inflow X PV Factor - Present Value Project B Initial Investment Project B $ 153,960 PV Factor Year Cash Inflow X = Present Value 1 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 Profitability index Profitability Index Choose Numerator: I Choose Denominator: - = Project A Project B If the company can only select one project, which should it choose? Required A Required B