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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 $(186,325) Project B $(154,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 37,000 59,000 75,295 86,400 62,000 38,000 47,000 55,000 79,000 20,000 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? 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 $ Initial Investment 186,325 Chart Values are Based on: Year Cash Inflow X PV Factor = Present Value 1 2 = 3 = 4 5 $ 186,325 Initial Investment Chart Values are Based on: i = % Year Cash Inflow x PV Factor = Present Value 1 2 3 4 5 = Project B Initial Investment $ 154,960 Year Cash Inflow X PV Factor = Present Value 1 2 3 = 4 5 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 $(186,325) Project B $(154,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 37,000 59,000 75,295 86,400 62,000 38,000 47,000 55,000 79,000 20,000 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? 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 Profitability index Profitability Index Choose Numerator: 1 Choose Denominator: 1 Project A Project B If the company can only select one project, which should it choose?
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