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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
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 (160,000) Project B $ (105,000) Initial investme Expected net cash flows in year: nt 40,000 56,000 80,295 90,400 65,000 32,000 50,000 66,000 72,000 24,000 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. RequiredA Required B For each alternative project compute the net present value For each alternative project compute the net present valu Project A Initial Investment $160,000 Chart Values are Based on: 10% Year Cash inflow x PV Factor = Present Value 36,360 46,256 60,326 61,743 40,365 $245,050 0.9090 0.8260 0.7513 0.6830 0.6210 40,000 x 56,000 x 80,295x 90,400 x 65,000 x 2 3 4 resent value of cash inflows resent value of cash outflows et present value $245,050 160,000 Project E Initial Investment 105,000 Year Cash Inflowx PV Factor 32,000 x 50,000 x 66,000 x 72,000 x 24,000 x Present Value 29 41,300 49,586 49,176 14,904 $154,995 0.9090 0.8260 0.7513 0.6830- 0.6210 2 3 4 $154,995 105,000 Required ARequired B For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Profitability Index Choose Numerator: Choose Denominator:Profitability Index Present value of net cash flowsinitial investment Profitability index Project A Project B If the company can only select one project, which should it choose? 0
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