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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
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. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Pool $ (181,325) Spa $ (144,960) Net cash flows in: Year 1 47,000 37,000 Year 2 51,000 50,000 Year 3 76,295 58,000 Year 4 87,400 75,000 Year 5 67,000 37,000 a. For each investment project compute the net present value. b. For each Investment project compute the profitability Index. c. If the company can only select one project, which should it choose on the basis of profitability Index? Complete this question by entering your answers in the tabs below. Req A Req B and C For each investment project compute the net present value. Pool Net Cash Flows x Present Value Present Value of Net Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Totals Spa Net Cash Flows x Present Value Present Value of Net Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Totals Req B and C > 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.) Initial investment Pool $ (181,325) Spa $ (144,960) Net cash flows in: Year 1 47,000 37,000 Year 2 51,000 50,000 Year 3 76,295 58,000 Year 4 87,400 75,000 Year 5 67,000 37,000 a. For each Investment project compute the net present value. b. For each Investment project compute the profitability Index. c. If the company can only select one project, which should it choose on the basis of profitability Index? Complete this question by entering your answers in the tabs below. Req A Req B and C b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Pool Spa Numerator: Profitability Index Denominator: If the company can only select one project, which should it choose on the basis of profitability index
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