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 $(182,325) Project B $(144,960) Initial inve stment Expected net cash flows in: Year 1 54,000 47,000 91,295 85,400 60,000 42,000 55,000 Year 2 67,000 83,000 29,000 Year 3 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? Answer is complete but not entirely correct. 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 182,325 Chart Values are Based on: 6 % Present Cash Inflow P Factor Year X Value 54,000 0.9434 50,944 2 47,000 | 0.8900 41,830 91,295 x 76,651 3 0.8396 85,400 0.7920 4 67,637 X Project A Initial Investment 182,325 Chart Values are Based on: Cash PV Factor Present Value Year X Inflow 1 54,000 0.9434 50,944 41,830 2 47,000 0.8900 X 91,295 0.8396 76,651 85,400 0.7920 67,637 4 X 5 60,000 0.7473 44,838 X $ 281,900 Present value of cash inflows Present value of cash outflows Net present value 281,900 182,325 99,575 Project B 144,960 PV Initial Investment Cash Inflow Present Value Year Factor 42,000 39,623 0.9434 55,000 0.8900 48,950 X 56,253 67,000 0.8396 X 65,736 4 83,000 0.7920 21,672 5 29,000 0.7473 232,234 $ Present value of cash inflows Present value of cash outflows Net present value $ 232,234 144,960 87,274 st 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 $(182,325) Project B $(144,960) Initial investment Expected net cash flows in: 54,000 47,000 42,000 55,000 Year 1 Year 2 Year 3 91,295 67,000 85,400 60,000 Year 4 83,000 29,000 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? Answer is complete but not entirely correct. 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 Choose Choose Numerator: Denominator: Present value of net cash flows Initial investment index Project $ 281,900 182,325 1.55 A Project 144,960 232,234 1.60 Project B If the company can only select one project, which should it choose? Required A Required B
