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PLEASE HELP. Thank you Exercise 11-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The
PLEASE HELP. Thank you
Exercise 11-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% 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 $(172,325) Project B $(145,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 46,000 46,000 77,295 79,400 68,000 32,000 58,000 64,000 78,000 37,000 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? Required A Required B For each alternative project compute the net present value. Initial Investment Year Cash Inflow Project B $ 145,960 PV Factor Present Value Project A Initial Investment $ 172,325 Chart Values are Based on: 1 2 3 Year Cash Inflow PV Factor Present Value 4 1 5 2 3 4 5 Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Profitability Index Profitability index 11 Profitability Index Choose Numerator: 1 Choose Denominator: 1 Project A Project B If the company can only select one project, which should it choose?Step by Step Solution
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