Tableau DA 11-3: Mini-Case, Net present value and profitability index LO P3

Mac Company is considering investing in two different projects, Stout and Boise. The company requests our help analyzing accounting data to ensure it makes the right investment decision. The Tableau Dashboard is provided for our analysis. The company requires a 12% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Boise - $30,000, Stout 24,000

Initial Investment per Project Stout Boise Net Cash Flows per Project Stout Boise $8,000 Year 1 $4,000 M $8,000 Year 2 $9,000 $8,000 Year 3 $13,000 $8,000 Year 4 $20,000 $8,000 Year 5 $18,000 $5,000 $o $0 $5,000 $10,000 $15,000 $20,000 $20,000 $15,000 $10,000 Net Cash Flows (Stout) Net Cash Flows (Boise) Compute the net present value of each project. Net Cash Flows Present Value of 1 at 12% Present Value of Net Cash Flows Stout Year 1 Year 2 Year 3 Year 4 Year 5 Totals Initial investment Net present value Boise Year 1 Year 2 Year 3 Year 4 Year 5 Totals Initial investment Net present value Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the profitability index for each project. If the company can select only one project, which should it choose on the basis of profitability index? Profitability Index Numerator: Denominator: Profitability index Stout Boise If the company can choose only one project, which should it choose? 0 0