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 Initial investment Project B $(186,325) $(155,960) Expected net cash flows in: Year 1 53,000 42,000 Year 2 56,000 49,000 Year 3 87,295 50,000 Year 4 81,400 82,000 Year 5 60,000 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? 186,325 Project A Initial Investment $ Chart Values are Based on: 8 % Cash Year Inflow 1 53,000x 2 56,000 3 87,295 4 81,400 5 60,000 PV Factor 0.9259 0.8573= 0.7938 Present Value 49,074 48,011 3 = 0.7350 11 69,295 59,829 40,836 267,045 0.6806 = $ Present value of cash inflows Present value of cash outflows $ 267,045 186,325 80,723 Net present value $ Initial Investment Year = 1 Project B $ Cash Inflow 42,000 49,000 50,000 82,000 36,000 X N >>> 155,960 PV Factor 0.9259 0.8573 0.7938 0.7350 0.6806 = = 3 Present Value 38,889 42,008 39,690 60,270 24,502 205,359 11 4 5 $ Initial Investment Year 155,960 PV Factor 0.9259 Project B $ Cash Inflow 42,000 X 49,000 50,000 82,000 36,000 Present Value 38,889 1 2 0.8573 = 42,008 3 0.7938 11 4 0.7350 II 11 5 39,690 60,270 24,502 205,359 0.6806 $ $ Present value of cash inflows Present value of cash outflows 205,359 155,960 49,403 Net present value $ Required A Required B Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 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 Choose Numerator: Choose / Denominator: Present value of net cash / Initial investment flows Project $ A 267,048 : $ 186,325 Project $ 205,363 155,960 B If the company can only select one project, which should it choose? Profitability Index Profitability index 1.43 1.32 Project A