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Following is information on two alternative investments being considered by Tiger Co. The company requires a 15% return from its investments. (PV of $1.
Following is information on two alternative investments being considered by Tiger Co. The company requires a 15% return from its investments. (PV of $1. FV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Expected net cash flows in: Year 1 2:43 Year 2 Year 3 a. Compute each project's net present value. Project X1 $(84,000) Project X2 $(122,000) 27,000 63,000 37,500 53,000 62,500 43,000 b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Compute each project's net present value. (Round your answers to the nearest whole dollar.) Present Value Present Value of Net Cash Flows of 1 at 15% Net Cash Flows Project X1 Year 1 Year 2 Year 3 Totals $ 0 $ 0 Amount invested Net present value Project X2 Year 1 Year 2 Year 3 Totals Amount invested Net present value $ 0 $ 0 $ 69 $ 0 Compute each project's profitability index. If the company can choose only one project, which should it choose? Project X1 Project X2 Profitability Index Choose Numerator: Choose Denominator: If the company can choose only one project, which should it choose? Profitability Index Profitability index 0 0
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