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Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 15% return from its investments. (PV of
Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 15% 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 X1 Initial investment $ (100,000) Net cash flows in: Year 1 37,000 Year 2 Year 3 47,500 72,500 Project X2 $ (150,000) 78,000 68,000 58,000 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose on th basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your answers to the nearest whole dollar.) Net Cash Present Value of Present Value of Flows 1 at 15% Net Cash Flows Project X1 Year 1 Year 2 Year 3 Totals Initial investment Net present value $ 0 $ 0 $ 0 Project X2 Year 1 Year 2 Year 3 Totals $ 0 $ EA Initial investment Net present value
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