Exercise 25-10 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 S1. FV of S1. PVA of $1 and EVA of S1). (Use appropriate factor(s) from the tables provided.) Project 5(189,325) Projects S(153, 960) Initial investment Expected net cash flows in year: 1 2 3 4 5 37,000 55.000 75.295 70.400 58.00 40,000 58,00 55,000 69,000 31,000 6. 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? Required A Required B For each alternative project compute the net present value. Project A Initial Investment $ 189,325 Chart Values are Based on: 1 Year Cash Inflow PV Factor Present Value 1 2 3 4 5 Initial Investment Year Cash Intlow Project B $ 153,960 PV Factor X Present Value 1 2 3 4 11 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 Denominator Choose Numerator: Profitability Index Profitability Index 0 Project A Project B If the company can only select one project, which should it choose? 0