Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $1) (Use appropriate factor(s) from the tables provided.)

Project A Project B
Initial investment $ (182,325 ) $ (149,960 )
Expected net cash flows in year:
1 45,000 27,000
2 57,000 58,000
3 80,295 58,000
4 91,400 80,000
5 72,000 25,000

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 it 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 $182,325
Chart Values are Based on:
i =
Year Cash Inflow x PV Factor = Present Value
1 =
2 =
3 =
4 =
5 =
Project B
Initial Investment $149,960
Year Cash Inflow x PV Factor = Present Value
1 =
2 =
3 =
4 =
5 =
  • 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
    Choose Numerator: / Choose Denominator: = Profitability Index
    / = Profitability index
    Project A 0
    Project B 0
    If the company can only select one project, which should it choose?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial accounting

Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom

9th edition

978-0132751216, 132751127, 132751216, 978-0132751124

More Books

Students also viewed these Accounting questions

Question

What is the major competition for your organization?

Answered: 1 week ago

Question

How accurate is this existing information?

Answered: 1 week ago