Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% 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		$	(188,325	)			$	(153,960	)
Expected net cash flows in:
Year 1			37,000					28,000
Year 2			45,000					49,000
Year 3			83,295					57,000
Year 4			95,400					75,000
Year 5			59,000					28,000

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		$188,325
Chart Values are Based on:
i =		%
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
4				=
5				=
Project B
Initial Investment		$153,960
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
4				=
5				=

• 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?