Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. 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.)

	Pool	Spa
Initial investment	$ (173,325)	$ (143,960)
Net cash flows in:
Year 1	47,000	39,000
Year 2	58,000	56,000
Year 3	83,295	62,000
Year 4	90,400	68,000
Year 5	65,000	33,000

a. For each investment project, compute the net present value. b. For each investment project, compute the profitability index.

Pool
Initial Investment		$173,325
Chart Values are Based on:
i =		%
Year	Cash Inflow	x	PV Factor	=	Present Value
Year 1				=
Year 2				=
Year 3				=
Year 4				=
Year 5				=
Spa
Initial Investment		$143,960
Year	Cash Inflow	x	PV Factor	=	Present Value
Year 1				=
Year 2				=
Year 3				=
Year 4				=
Year 5				=

Profitability Index
	Numerator:	/	Denominator:
		/		=	Profitability index
Pool
Spa
If the company can only select one project, which should it choose on the basis of profitability index?