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 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 A $(177,325) Project B $(150,960) Initial investment Expected net cash flows in year: 1 2 3 41,000 49,000 84,295 76,400 58,000 39,000 48,000 63,000 83,000 32,000 4 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 net present value. Project A $ 177,325 Initial Investment Chart Values are Based on: E Year Cash Inflow PV Factor = Present Value 1 = 2 3 4 5 = Project B $ 150,960 Initial Investment Year Cash Inflow PV Factor II = Present Value 1 = 2. = 3 4 5 = 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: Choose Denominator: = Profitability Index Profitability index / = Project A Project B If the company can only select one project, which should it choose?