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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 $(174,325) Project B $(150,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 50,000 42,000 86,295 78,400 55,000 25,000 50,000 56,000 67,000 26,000 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? For each alternative project compute the net present value. Project A Initial Investment S 174325 Chart Values are Based on: ol Year Cash Inflow X PV Factor - Present Value Initial Investment Year Cash Inflow Project B $ 150,960 X PV Factor = Present Value For each alternative project compute the profitability index. If the company can only select one project, which should i choose? Profitability Index I Choose Denominator: Choose Numerator: = = Profitability Index Profitability index Project A Project B If the company can only select one project, which should it choose
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