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Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments (PV of
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments (PV of $1, EV of $1, PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.) Project X1 Initial investment $ (104,000) Project X2 $ (168,000) Net cash flows in: Year 1 37,000 78,000 Year 2 Year 3 47,500 68,000 72,500 58,000 a. Compute each project's net present value. b. Compute each project's profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 6% Present Value of Net Cash Flows Project X1 Year 1 Year 2 Year 31 Totals Initial investment Net present value Project X2 Year 11 Year 21 Year 3 Totals Initial investment Net present value
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