Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% 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		$	(189,325	)			$	(152,960	)
Expected net cash flows in:
Year 1			40,000					27,000
Year 2			53,000					45,000
Year 3			87,295					50,000
Year 4			94,400					66,000
Year 5			64,000					21,000

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?

Project A Initial Investment $ 189,325 Chart Values are Based on: i = % Year Cash Inflow PV Factor = Present Value 1 II 2 = 3 4 5 Initial Investment Year Cash Inflow 1 Project B $ 152,960 PV Factor = II Present Value 11 2 = 3 II 4 = 5 II Profitability Index 1 Choose Denominator: Choose Numerator: Profitability Index Profitability index / II Project A Project B If the company can only select one project, which should it choose