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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. EV

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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. EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project $(186,325) Project B $(152,960) Initial investment Expected net cash flows in Year 1 Year 2 Year 3 37.000 53,000 78, 295 78.400 62,000 27,000 62.000 58,000 69.000 30,000 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? Complete this question by entering your answers in the tabs below. Required A Required B Project A Initial Investment $ 186,325 Chart Values are Based on: 1% Year Cash Inflow X PV Factor = Present Value 1 = 2 3 4 5 Present value of cash inflows Present value of cash outflows Net present value Project B $ 152,960 X PV Factor = Present Value Initial Investment Year Cash Inflow 1 2 5 Present value of cash outflows Net present value L Project B $ 152,960 X PV Factor = Present Value Initial Investment Year Cash Inflow 1 2 3 = 5 = Present value of cash inflows Present value of cash outflows Net present value (Required a Required B > 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 profitability index. If the company can only select one project, which should it choose? Profitability Index 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

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