5 1.11 points eBook QS 26-18 (Algo) Profitability index LO P3 Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $560,000 and has a present value of all its cash flows of $1,900,000. Project 2 requires an initial investment of $4,000,000 and has a present value of all its cash flows of $7,000,000. (a) Compute the profitability index for each project. (b) Based on the profitability index, which project should the company select? Complete this question by entering your answers in the tabs below. Hint Ask Print o References Required A Required B Compute the profitability index for each project. Project 1 Project 2 Numerator: Profitability Index Denominator: Profitability Index / Profitability index 0 < Required A Required B > 0 5 1.11 points QS 26-18 (Algo) Profitability index LO P3 Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $560,000 and has a present value of all its cash flows of $1,900,000. Project 2 requires an initial investment of $4,000,000 and has a present value of all its cash flows of $7,000,000. (a) Compute the profitability index for each project. (b) Based on the profitability index, which project should the company select? eBook Complete this question by entering your answers in the tabs below. Hint Ask Print References Required A Required B Based on the profitability index, which project should the company select? Based on the profitability index, which project should the company select? < Required A Required B > 00 8 1.11 points Skipped eBook Hint QS 26-23 (Algo) Internal rate of return LO P4 Perez Company is considering an investment of $27,160 that provides net cash flows of $8,200 annually for four years. (a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below. Required A Required B What is the internal rate of return of this investment? Ask Present value factor Internal rate of return Print References % < Required A Required B > 00 8 1.11 points Skipped eBook QS 26-23 (Algo) Internal rate of return LO P4 Perez Company is considering an investment of $27,160 that provides net cash flows of $8,200 annually for four years. (a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below. Hint Required A Required B The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return? Ask Should the company invest in this project on the basis of internal rate of return? < Required A Required B > Print References