Question
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 $ (172,325 ) $ (143,960 ) Expected net cash flows in: Year 1 50,000 35,000 Year 2 45,000 59,000 Year 3 82,295 66,000 Year 4 89,400 72,000 Year 5 72,000 31,000 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?
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