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Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 7% return from its investments. (PV of
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 7% 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 $ (96,000) Project X2 $ (152,000) Net cash flows in: Year 1 33,000 72,000 Year 2 43,500 62,000 Year 31 68,500 52,000 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?
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