Following is information on two alternative investments being considered by Jolee Company. The company requires a...

   

Transcribed Image Text:

Following is information on two alternative investments being considered by Jolee 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 Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Project A $ (185,325) 40,000 46,000 81,295 82,400 72,000 Project B $(155,960) 35,000 51,000 51,000 74,000 28,000 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? Following is information on two alternative investments being considered by Jolee 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 Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Project A $ (185,325) 40,000 46,000 81,295 82,400 72,000 Project B $(155,960) 35,000 51,000 51,000 74,000 28,000 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?

Answer rating: 100% (QA)

ANSWERS a NPV Project A 5105995 NPV project B 2425280 b PI Project A 1275 PI ... View the full answer