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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

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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 of $1. PVA of $1, and FVA of S1 (Use appropriate factor(s) from the tables provided) Initial investment Project A Projects $(173,325) Expected net cash flows in: $(151,960) Year 1 50,000 28,000 Year 2 46,000 43,000 Year 3 92,295 67,000 Year 4 80,400 73,000 Year 5 64,000 37,000 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 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 $ 173 325 Chart Values are Based on: For each alternative project compute the net present value. Project A Initial Investment $ 173,325 Chart Values are Based on: 1 = % Year Cash Inflow PV Factor = Present Value 1 1 11 N = 3 11 4 11 5 11 Initial Investment Year Cash Inflow 1 Project B $ 151.960 PV Factor Present Value 11 2 11 3 4 II 5 Initial Investment Project B $ 151,960 x PV Factor Year Cash Inflow 11 Present Value 1 11 N = 3 4 11 IE11 5 For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Profitability Index 1 Choose Denominator: Choose Numerator: Profitability Index Profitability index = Project A Project B If the company can only select one project, which should it choose? 0 0

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