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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

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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 investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Net cash flows in: Pool $ (162,880) Spa $ (105, cea) Year 1 Year 2 Year 3 Year 4 Year 5 40,00 56,898 80,295 90,400 65,000 32,080 50,000 66,000 72,000 24,000 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. Reg A Red Band For each alternative project, compute the net present value. Pool 5 160.000 Initial Investment Chart Values are Based on: : i=1 % Cash Inflow X PV Factor Year Year 1 Year 2 = Present Value = = Year 3 Year 4 Year 5 Spa $ 105,000 PV Factor = Present Value Initial Investment Year Cash Inflow Year 1 Year 2 Year 3 Year 4 Year 5 = 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 Net cash flows in: Pool $ (160, 880) Spa $ (185,800 Year 1 Year 2 Year 3 Year 4 Year 5 40,000 56,899 8e, 295 90.400 65,00 32, e8e 58, we 66,080 72,000 24,080 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. Reg A Reg B and C b. For each alternative project, compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Profitability Index 1 Numerator: Denominator: = Profitability index 0 0 Pool 0 Spa If the company can only select one project, which should it choose on the basis of profitability index?

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