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 | Project B |
| Initial investment | | $ | (177,325 | ) | | | $ | (157,960 | ) | |
| Expected net cash flows in: | | | | | | | | | | |
| Year 1 | | | 37,000 | | | | | 39,000 | | |
| Year 2 | | | 53,000 | | | | | 46,000 | | |
| Year 3 | | | 74,295 | | | | | 55,000 | | |
| Year 4 | | | 79,400 | | | | | 70,000 | | |
| Year 5 | | | 68,000 | | | | | 30,000 | | |
| |
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?
CHwkCh24 15 pts (Ignore 25) Seved 7 Exercise 24-10 NPV and profitability Index LO P3 3.12 points 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.) eBook Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(177,325) 37,eee 53,000 74,295 79,400 68,000 Project B $(157,968) 39, eee 46,000 55, eee 78,000 30,eee Hint Print 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? Reference: 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 177,325 Chart Values are Based on: Initial Investment S % Cash Inflow PV Factor Present Value Year 1 2 3 = 4 5 Project B S 157,960 PV Factor Present Value Initial Investment Year Cash Inflow 1 2 3 4 5 Exercise 24-10 NPV and profitability Index LO P3 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 Project B Initial investment $(177,325) $(157,960) Expected net cash flows in: Year 1 37,000 39,eee 53, eee 46,eee Year 3 74,295 55, een Year 4 79,488 78,eee Year 5 68, eee 38,eee Year 2 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 profitability index. If the company can only select one project, which should it choose? Profitability Index Choose Numerator: 1 Choose Denominator: Profitability Index 1 Profitability index Project A Project B If the company can only select one project, which should it choose? =
