Exercise 11-10 (Algo) Net present value, unequal cash flows, and profitability index LO P3

Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6%

return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA of S1) (Use appropriate factor(s) from the tables provided.)

Project X1

$ (84,000)

Project X2

$ (128,000)

Initial investment

Net cash flows in:

Year

1

Year 2

Year

3

27,000

37,500

62,500

63,000

53,000

43.000

a. Compute each project's net present value

b. Compute each project's profitability index

c. If the company can choose only one project, which should it choose on the basis of profitability index?

Exercise 11-10 (Algo) Net present value, unequal cash flows, and profitability index LO P3 Following is information on two altemative investment projects being considered by Tiger Company. The company requires a 6% return from its investments. (PV of S1. FV of S1, PVA of S1, and FVA of S1) (Use approptiate factor(s) from the tables provided.) a. Compute cach projects netpresent value b. Campute each project's profitability index c. If the company can choose only one project. which should it choose on the basis af peofidability merest Compute. each project's net present value. (Round your final answers to the riearest dollari) Complete this question by ertering your answers in the tabs below. Compute each project's profitability index