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Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 10% return from its investments. (PV of
Following is information on two alternative investments projects being considered by Tiger 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.) Initial investment Project X1 $ (125,000) Project X2 $ (190,000) Net cash flows in: Year 1 46,000 91,500 Year 2 56,500 81,500 Year 3 81,500 71,500 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 the 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) ces Required A Required B. Compute each project's net present value. (Round your answers to the nearest whole dollar.) Present Value of Present Value of Net Cash Flows Project X1 Year 1 Year 21 Year 3 Totals Initial investment Net present value Project X2 Year 1 Year 2 Year 3 Totals Initial investment Net present value 1 at 10% Net Cash Flows $ 0 $ 0 $ 0 $ $ 0 $ Required A 0 Required B > Check my work Required A Required B Compute each project's profitability index. If the company can choose only one project, which should it choose on the basis of profitability index? Project X1 Profitability Index Numerator: Denominator: Project X2 If the company can choose only one project, which should it choose on the basis of profitability index? Profitability index 0 0
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