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Exercise 24-11 Net present value, profitability index LO P3 Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% 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 Project x1 $(106,000) Project x2 $(172,000) 2 3 38,000 48,500 73,500 79,500 69,500 59,500 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Compute each project's net present value. (Round your final answers to Net Cash Flows Present Value of 1 at 7% Present Value of Net Cash Flows Project X1 Year 1 Year 2 Year 3 Totals GA 0 $ O Amount invested $ 0 Net present value Project X2 Year 1 Year 2 Year 3 $ 0 $ 0 Totals Amount invested Net present value $ 0 Required A Required B Compute each project's profitability index. If the company can choose only one project, which should it ch Profitability Index 1 Choose Denominator: Choose Numerator: Profitability Index Profitability index 0 Project X1 Project X2 Le company can choose only one project, which should it choose? 0 Required A Required B A machine costs $400,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $64,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount PV Factor Annual cash flow Residual value Present Value $ 0 0 Net present value