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Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% return from its investments. (PV of $1. FV
Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% 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 $(182,325) Project B $(142,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 51, eee 45,800 76,295 89, 4ee 66, eee 34,000 58,888 60,000 73,000 25,000 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? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value. Project A Initial Investment Chart Values are Based on: $ 182.325 % i = Year Cash Inflow PV Factor Present Value 1 2 3 = 4 5 Initial Investment Year Cash Inflow Project B s 142.960 X PV Factor Present Value 1 = = 2 3 = 4 = 5 Required A Required B > Required A Required B For each alternative project compute the profitability index. If the company can only select one project, which should it choose? = Profitability Index Profitability index Profitability Index Choose Numerator: 1 Choose Denominator: 1 Project A Project B If the company can only select one project, which should it choose? 0 0
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