Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please correct answers only!!! Following is information on two alternative Investments. Beachside Resort is considering building a new pool or spa. The company requires a

please correct answers only!!!
image text in transcribed
image text in transcribed
image text in transcribed
Following is information on two alternative Investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA 01:51) (Use appropriate factor(s) from the tables provided.) Pool Spa Initial investment $ (160,000) $ (105,000) Net cash flows int Year 1 40.000 32,000 Year 2 56,000 50.000 Year 3 80,295 66,000 Year 4 90,400 72,000 Year 5 65,000 24,000 a. For each investment project compute the net present value. b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Reg A Reg Band For each alternative project compute the net present value. Pool Net Cash Flows * Present Value Present Value of Nat Cash Flows Yeart Year 2 Year 3 Year 4 ### Req A Req B and C For each alternative project compute the net present value. Pool Net Cash Flows Present Value Present Value of Net Cash Flows Year 1 11 II Year 2 Year 3 Year 4 = Year 5 11 Totals $ 0 Spa Net Cash Flows Present Value = Present Value of Net Cash Flows Year 1 Il Year 2 11 Year 3 = Year 4 HI Year 5 Il Totals $ 0 Complete this question by entering your answers in the tabs below. Req A Reg B and C b. For each alternative project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Profitability Index Numerator: Denominator: = Profitability index 0 Pool Spa If the company can only select one project, which should it choose on the basis of profitability index? 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

New Principles Of Best Practice In Clinical Audit

Authors: Robin Burgess

2nd Edition

1138443646, 978-1138443648

More Books

Students also viewed these Accounting questions