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Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments. (PV of $1, FV

Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% 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.) image text in transcribedimage text in transcribed

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Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% 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 $(106,000) Project x2 $(172,000) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 38,000 48,500 73,500 79,500 69,500 59,500 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 7% Present Value of Net Cash Flows $ $ 38,000 48,500 73,500 $ 160,000 0.9345 0.8734 0.8163 35,511 X 42,360 59,998 137,869 106,000 $ $ 31,869 Project X 1 Year 1 Year 2 Year 3 Totals Amount invested Net present value Project X2 Year 1 Year 2 Year 3 Totals Amount invested Net present value 0.9345 $ 0.8734 $ 79,500 69,500 59,500 $ 208,500 0.8163 74,293 X 60,701 48,570 183,564 172,000 $ $ 11,564 Required A Required B > Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% 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 xi $(106,000) Project x2 $(172,000) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 38,000 48,500 73,500 79,500 69,500 59,500 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's profitability index. If the company can choose only one project, which should it choose? = Profitability Index Choose Numerator: 1 Choose Denominator: Present value of net cash 11 Initial investment flows Project $ X1 31,869 $ 106,000 Project $ 11,564 11 $ X2 172,000 If the company can choose only one project, which should it choose? Profitability Index Profitability index 0.30 II 0.07 Project X1

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