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		$	(174,325	)			$	(152,960	)
Expected net cash flows in year:
1			41,000					44,000
2			60,000					53,000
3			72,295					68,000
4			87,400					81,000
5			59,000					30,000

For each alternative project compute the net present value.

Project A
Initial Investment		$174,325
Chart values are based on:
i =
Year	Cash inflow	x	Table factor	=	Present Value
1				=
2				=
3				=
4				=
5				=
Project B
Initial Investment		$152,960
Year	Cash inflow	x	Table factor	=	Present Value
1				=
2				=
3				=
4				=
5				=

For each alternative project compute the profitability index.

	Choose Numerator:	/	Choose Denominator:	=	Profitability index
		/		=	Profitability index
Project A
Project B

2. Assume If the company can only select one project, which should it choose?

Project A or Project B