Following is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% 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 X1	Project X2
Initial investment	$ (88,000)	$ (136,000)
Net cash flows in:
Year 1	29,000	66,000
Year 2	39,500	56,000
Year 3	64,500	46,000

a. Compute each projects net present value. b. Compute each projects profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index?

	Net Cash Flows	Present Value of 1 at 8%	Present Value of Net Cash Flows
Project X1
Year 1
Year 2
Year 3
Totals	$		$
Initial investment
Net present value			$
Project X2
Year 1
Year 2
Year 3
Totals	$		$
Initial investment
Net present value			$

		Profitability Index
	Numerator:	/	Denominator:	=	Profitability Index
Project X1
Project X2