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 B $(145,960) Project A $(179,325) Initial investment Expected net cash flows in: Year 1 42,000 35,000 Year 2 49,000 58,000 65,000 72,000 24,000 Year 3 86,295 86,400 63,000 Year 4 Year 5 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? "Kequired'A Required'B For each alternative project compute the net present value. Project A Initial Investment 179,325 Chart Values are Based on: i = Year Cash Inflow PV Factor Present Value 3 4 Project B Initial Investment 145,960 Year Cash Inflow PV Factor Present Value 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 I Choose Denominator: Choose Numerator: Profitability Index Profitability index Project A Project B If the company can only select one project, which should it choose? TABLE B.4 f= [(1 + iy" 1]/i Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 10% 12% 15% 1.0000 2.1200 1.0000 2.1500 1.0000 2.0600 1.0000 1.0000 1.0000 1.0000 1.0000 2.0500 1.0000 1.0000 1.0000 2.0900 1.0000 2.1000 2.0400 3.1216 4.2465 5.4163 2.0700 2.0800 2.0100 2.0200 2.0300 3.3744 4.7793 6.3528 3.0301 3.0604 3.0909 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 4.6410 3.4725 4.9934 4.0604 4.1216 4.1836 5.3091 4.3101 4.3746 4.4399 4.5061 4.5731 5.9847 7.5233 9.2004 5.2040 5.1010 5.5256 5.6371 5.7507 5.8666 6.1051 6.7424 6.1520 6.3081 7.4343 8.5830 7.3359 8.7537 6.4684 6.6330 6.8019 6.9753 7.1533 7.7156 8.1152 7.6625 8.8923 7.8983 8.1420 9.5491 8.3938 8.6540 9.4872 11.4359 10.0890 7.2135 8.9228 11.0668 8.2857 9.3685 9.2142 9.8975 10.2598 10.6366 11.0285 13.0210 12.2997 13.7268 16.7858 20.3037 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.5795 14.7757 13.1808 14.9716 12.5779 14.4866 10 10.4622 10.9497 11.4639 12.0061 13.8164 15.1929 17.5603 20.1407 22.9534 15.9374 17.5487 15.7836 11 11.5668 12.1687 12.8078 13.4864 14.2068 16.6455 18.5312 20.6546 24.3493 21.3843 12 12.6825 13.4121 14.1920 15.0258 16.6268 15.9171 16.8699 17.8885 18.9771 24.1331 29.0017 13 13.8093 14.6803 15.6178 17.7130 18.8821 20.1406 21.4953 24.5227 28.0291 34.3519 18.2919 27.9750 32.3926 14 14.9474 16.0969 15.9739 17.0863 19.5986 21.0151 22.5505 25.1290 24.2149 27.1521 26.0192 40.5047 21.5786 15 17.2934 18.5989 20.0236 23.2760 29.3609 31.7725 37.2797 47.5804 25.6725 55.7175 16 17.2579 18.6393 20.1569 21.8245 23.6575 27.8881 30.3243 33.0034 35.9497 42.7533 25.8404 28.2129 33.7502 17 18.4304 20.0121 21.7616 23.6975 30.8402 36.9737 40.5447 48.8837 65.0751 23.4144 25.1169 22.0190 24.2974 26.8704 55.7497 63.4397 72.0524 133.3339 25.6454 28.1324 27.6712 29.7781 41.6459 56.0849 73.6522 33.9990 37.3790 40.9955 63.2490 41.3013 46.0185 51.1601 84.7009 18 19.6147 21.4123 30.9057 37.4502 45.5992 75.8364 30.5390 33.0660 51.1591 57.2750 98.3471 20.8109 22.8406 33.7600 36.7856 41.4463 45.7620 73.1059 88.2118 102.4436 19 20 47.7271 66.4388 32.0303 40.5681 49.9945 60.4020 212.7930 25 28.2432 36.4593 54.8645 241.3327 215.7108 271.0244 431.6635 30 34.7849 47.5754 79.0582 94.4608 113.2832 136.3075 164.4940 434.7451 41.6603 48.8864 138.2369 199.6351 60.4621 35 90.3203 111.4348 172.3168 259.0565 881.1702 337.8824 767.0914 40 75.4013 95.0255 120.7998 154.7620 442.5926 1,779.0903 SUsed to calculate the future valu of a series of equal pay ments made at the end of cach period. For example: What is the future value of $4,000 per year for 6 years assuming an annual interest rate of 8%? For (n= 6, i = 8%), the FV factor is 7.3359. $4,000 per year for 6 years accumulates to $29,343.60 ($4,000 x 7.3359). -|1-a" TABLE B.3 /i (1 + i)" Present Value of an Annuity of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0.9901 0.9346 0.9804 0.9709 0.9615 0.9524 0.9434 0.9259 0.9174 1.7591 0.9091 0.8929 0.8696 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8080 1.7833 1.7355 1.6901 1.6257 2.9410 3.9020 4.8534 2.5771 3.3121 2.8839 2.7232 2.6730 2.4869 2.8286 2.7751 2.6243 2.5313 2.4018 2.2832 3.6299 4.4518 3.0373 3.6048 2.8550 3.3522 3.7171 3.8077 3.5460 3.4651 3.3872 3.2397 3.1699 4.2124 4.7135 4.5797 5.4172 4.3295 4.1002 3.9927 4.6229 3.8897 3.7908 4.3553 5.7955 5.6014 5.2421 5.0757 4.9173 4.7665 4.4859 4.1114 3.7845 6.0021 6.7327 6.7282 6.4720 7.3255 8.1622 6.2303 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 8.5660 6.4632 5.5348 4.9676 4.4873 7.0197 6.2098 5.9713 5.7466 5.3349 7.1078 7,7217 6.8017 7.7861 7.4353 6.5152 7.0236 6.2469 5.9952 5.7590 5.3282 4.7716 8.1109 6.7101 6.1446 9.4713 8.9826 8.5302 7.3601 6.4177 5.6502 5.0188 9.2526 9.9540 10.6350 11.2961 6.8052 10.3676 8.7605 6.4951 6.8137 5.2337 9.7868 10.5753 8.3064 7.8869 7.4987 7.1390 5.9377 9.3851 9.9856 6.1944 6.4235 6.6282 11.2551 8.8633 8.3838 7.9427 7.5361 7.1607 5.4206 8.8527 9.2950 7.9038 8.2442 12.1337 9.3936 7.4869 5.5831 5.7245 11.3484 8.3577 7.1034 7.3667 13.0037 12.1062 10.5631 9.8986 8.7455 7.7862 13.8651 10.3797 12.8493 11.9379 11.1184 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 11.6523 8.3126 14.7179 13.5777 12.5611 10.8378 10.1059 9.4466 8.8514 7.8237 6.9740 5.9542 6.0472 15.5623 14.2919 13.1661 12.1657 12.6593 11.2741 10.4773 9.7632 9.1216 8.5436 8.7556 8.0216 7.1196 16.3983 14.9920 13.7535 11.6896 10.8276 10.0591 9.3719 8.2014 7.2497 6.1280 14.3238 7.3658 17.2260 15.6785 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 6.1982 8.5136 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 7.4694 6.2593 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 17.2920 11.2578 25.8077 22.3965 24.9986 27.3555 19.6004 15.3725 16.3742 13.7648 12.4090 10.2737 10.5668 10.7574 9.4269 9.6442 8.0552 6.5660 14.4982 15.0463 29.4086 21.4872 18.6646 19.7928 12.9477 11.6546 11.9246 8.1755 6.6166 32.8347 23.1148 17.1591 13.3317 9.7791 8.2438 6.6418 *Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the present value of $2,000 per year for 10 years assuming an annual interest rate of 9%? For (n = 10, i= 9%), the PV factor is 6.4177. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 x 6.4177). TABLE B.2+ f = (1+ iy" Future Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0700 1.1449 1.2250 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0800 1.1664 1.2597 1.0600 1.1236 1.1910 1.0200 1.0300 1.0500 1.1200 1.0100 1.0400 1.0900 1.1000 1.1500 1.2100 1.3310 1.0201 1.0404 1.0609 1.0816 1.1025 1.1881 1.2544 1.3225 1.4049 3 1.0303 1.0612 1.0927 1.1249 1.1576 1.2950 1.5209 4 1.0406 1.0824 1.1255 1.1699 1.2155 1.2625 1.3108 1.3605 1.4116 1.4641 1.5735 1.7490 1.4026 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4693 1.5386 1.6105 1.7623 2.0114 1.1262 1.4185 1.5869 1.6771 1.8280 1.9738 6. 1.0615 1.1941 1.2653 1.3401 1.5007 1.7716 2.3131 1.9487 2.2107 1.0721 1.1487 1.2299 1.3159 1.4071 1.5036 1.6058 1.7138 2.6600 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 1.7182 1.8509 1.9926 2.1436 2.4760 3.0590 2.1719 2.3674 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.9990 2.3579 2.7731 3.5179 1.2190 1.3439 10 1.1046 1.4802 1.6289 1.7908 1.9672 2.1589 2.5937 3.1058 4.0456 1.2434 1.2682 11 1.1157 1.3842 1.5395 1.7103 1.8983 2.1049 2.3316 2.5804 2.8531 3.4785 4.6524 5.3503 2.2522 2.4098 12 1.1268 1.4258 1.6010 1.6651 1.7959 1.8856 2.0122 2.5182 2.8127 3.1384 3.8960 2.1329 3.4523 13 1.1381 1.2936 1.3195 1.4685 2.7196 3.0658 4.3635 6.1528 3.3417 3.6425 2.2609 2.3966 4.8871 14 1.1495 1.5126 1.7317 1.9799 2.5785 2.9372 3.7975 7.0757 4.1772 4.5950 5.0545 5.5599 8.1371 9.3576 1.5580 1.6047 1.8009 2.0789 3.1722 5.4736 15 1.1610 1.3459 1.3728 2.7590 16 1.1726 1.8730 2.1829 2.5404 2.9522 3.4259 3.9703 6.1304 2.2920 2.6928 17 1.1843 1.4002 1.6528 1.9479 3.1588 3.7000 4.3276 6.8660 10.7613 2.8543 3.0256 18 1.1961 1.4282 1.7024 2.0258 2.4066 3.3799 3.9960 4.7171 7.6900 12.3755 5.1417 19 1.2081 1.4568 1.7535 2.1068 2.5270 3.6165 3.8697 4.3157 4.6610 6.8485 6.1159 8.6128 14.2318 1.4859 2.6533 16.3665 20 1.2202 1.8061 2.0938 2.1911 3.2071 5.6044 6.7275 9.6463 4.2919 25 1.2824 1.6406 2.6658 3.3864 4.3219 5.5160 5.4274 8.6231 10.8347 17.0001 32.9190 1.8114 1.9999 2.2080 5.7435 7.6861 10.2857 17.4494 28.1024 29.9599 52.7996 2.4273 2.8139 3.2620 3.2434 13.2677 20.4140 66.2118 30 1.3478 7.6123 10.0627 1.4166 10.6766 133.1755 267.8635 35 3.9461 14.7853 40 1.4889 4.8010 7.0400 14.9745 21.7245 31.4094 45.2593 93.0510 "Used to compute the future value of a known present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n= 20 and i= 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 x 1.4859). TABLE B.1 p = 1/(1 + iy" Present Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0.9174 0.9901 0.9709 0.9434 0.9259 0.9091 0.8929 0.9804 0.9615 0.9524 0.9346 0.8696 0.9803 0.8417 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8264 0.7972 0.7561 0.9423 0.9151 0.9706 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.7118 0.6575 0.9238 0.7350 0.7084 0.6355 0.5718 0.4972 0.9610 0.8885 0.8548 0.8227 0.7921 0.7629 0.6830 0.7835 0.7462 0.9515 0.9057 0.8626 0.8219 0.7903 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.6663 0.9420 0.8880 0.8375 0.7050 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.9235 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.8535 0.7894 0.7664 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 9. 0.9143 0.8368 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 0.4224 10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5847 0.5568 0.5303 0.5584 0.5083 0.4632 0.3855 0.3220 0.2472 0.8963 0.8874 0.8787 0.6496 0.2875 0.2567 0.2292 0.2046 0.1827 11 0.8043 0.7224 0.7014 0.6810 0.5268 0.4751 0.4289 0.3971 0.3875 0.3505 0.2149 0.7885 0.3555 0.3262 12 0.6246 0.4970 0.4440 0.3186 0.1869 0.4688 0.4423 0.4173 0.3936 0.2897 0.2633 0.2394 13 0.7730 0.6006 0.4150 0.3677 0.1625 0.2992 0.2745 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.3878 0.3405 0.1413 0.8613 0.8528 0.8444 0.8360 0.8277 0.7430 0.7284 0.7142 0.5553 0.5339 0.5134 0.4810 0.4581 0.4363 0.1229 0.1069 0.6419 0.3624 0.3152 0.2919 0.2703 15 16 0.6232 0.3387 0.2519 0.2176 0.1631 0.6050 0.5874 0.5703 0.3166 0.2959 0.2765 0.3714 0.3503 0.1456 0.0929 17 0.2311 0.1978 0.2120 0.1300 0.1161 0.1037 18 0.7002 0.4936 0.4155 0.2502 0.1799 0.0808 0.0703 0.0611 0.2317 0.2145 19 0.6864 0.4746 0.3957 0.3305 0.1945 0.1784 0.1635 0.1486 0.0923 0.3118 20 0.8195 0.6730 0.5537 0.4564 0.3769 0.2584 0.1842 25 0.7798 0.6095 0.4776 0.4120 0.3751 0.2953 0.2330 0.1460 0.1160 0.0588 0.0304 0.0151 0.0994 0.0676 0.0460 0.0334 30 0.7419 0.5521 0.3083 0.2314 0.1741 0.1314 0.0937 0.0668 0.0754 0.0573 0.7059 0.6717 0.1813 0.1420 0.0490 0.0318 0.3554 0.3066 0.2534 0.1301 0.0356 0.0221 0.0189 35 0.5000 0.4529 0.0075 40 0.2083 0.0972 0.0107 0.0037 *Used to compute the present value of a known future amount. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? Using the factors of n= 12 and i = 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. You would need to invest $2,784 today ($5000 x 0.5568)