Following is information on two alternative investments being considered by Tiger Co. The company requires a 4% 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 X1					Project X2
Initial investment		$	(80,000	)			$	(120,000	)
Expected net cash flows in year:
1			25,000					60,000
2			35,500					50,000
3			60,500					40,000

a. Compute each projects net present value. b. Compute each projects profitability index. If the company can choose only one project, which should it choose?

Required A Required B Compute each project's profitability index. If the company can choose only one project, which shoul Choose Numerator: Present value of net cash Profitability Index Choose Denominator Initial investment flows Project X 1 Project 93.684 121.902 80.000 120.000 Profitability Index = Profitability index = 1.17 = 1.02 Project X1 X2 If the company can choose only one project, which should it choose?