Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% 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 Project B Initial investment $ (188,325 ) $ (143,960 ) Expected net cash flows in: Year 1 39,000 44,000 Year 2 56,000 59,000 Year 3 85,295 63,000 Year 4 85,400 82,000 Year 5 70,000 25,000 .

a. For each alternative project compute the net present value.

Project A
Initial Investment		$188,325
Chart Values are Based on:
i =		%
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
4				=
5				=
Project B
Initial Investment		$143,960
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
4				=
5				=

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
		/		=	Profitability index
Project A
Project B
If the company can only select one project, which should it choose?