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Rowan Company is considering two alternative Investment projects. Each requires a $259,000 Initlal Investment. Project A is expected to generate net cash flows of $69,000
Rowan Company is considering two alternative Investment projects. Each requires a $259,000 Initlal Investment. Project A is expected to generate net cash flows of $69,000 per year over the next slx years. Project B is expected to generate net cash flows of $59,000 per year over the next seven years. Management requires an 9% rate of return on its investments. PV of $1,FV of $1, PVA of $1, and FVA of \$1) (Use approprlate factor(s) from the tables provlded.) Required: 1. Compute each project's net present value. 2. Compute each project's profitability Index. 3. If the company can choose only one project, which should it choose, based on profitability index? Complete this question by entering your answers in the tabs below. Compute each project's net present value. (Do not round intermediate calculations. Round your present value factor to 4 decimals and your final answers to the nearest whole dollar.) Compute each project's profitability index. (Do not round intermediate values. Enter your answers rounded to the nearest whole dollar.) If the company can choose only one project, which should it choose, based on profitability index
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