Following is information on two alternative investments being considered by Jolee Company. 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.)

	Project A					Project B
Initial investment		$	(180,325	)			$	(146,960	)
Expected net cash flows in year:
1			35,000					35,000
2			49,000					58,000
3			89,295					54,000
4			82,400					76,000
5			61,000					36,000

a. For each alternative project compute the net present value. b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose?

Project A 180,325 Initial Investment Chart Values are Based on: Year Cash Inflow x PV FactorPresent Value 2 4 Project B 146,960 Initial Investment Year Cash Inflow x PV Factor Present Value 2 4 5 Profitability Index Choose Denominator:Profitability Index Profitability index Choose Numerator: Project A Project B If the company can only select one project, which should it choose? 0 0