Following is information on two alternative investment projects being considered by Tiger Company. The company requires...
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Following is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% 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.) Project X1 Project X2 $ $ Initial investment (108,000) (176,000) Net cash flows in: Year 39,000 81,000 1 Year 49,500 71,000 2 Year 3 74,500 61,000 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? Complete this question by entering your answers in the tabs below. Required Required Required A B C Compute each project's net present value. (Round your final answers to the nearest dollar.) Present Net Cash Flows Present Value of 1 Value of Net at 8% Cash Flows Project X1 Year 1 Year 2 Year 3 Totals $ 0 $ 0 Initial investment Net present $ 0 value Project X2 Year 1 Year 2 Year 3 Totals $ 0 $ 0 Initial investment Net present value $ 0 < Required A Required B > Complete this question by entering your answers in the tabs below. Required Required Required A B Compute each project's profitability index. Project X1 Project X2 Profitability Index Profitability Numerator: Denominator: = Index Profitability = index 0 0 < Required A Required C > Complete this question by entering your answers in the tabs below. Required Required Required A B C If the company can choose only one project, which should it choose on the basis of profitability index? If the company can choose only one project, which should it choose on the basis of profitability index? < Required B Required C > Following is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% 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.) Project X1 Project X2 $ $ Initial investment (108,000) (176,000) Net cash flows in: Year 39,000 81,000 1 Year 49,500 71,000 2 Year 3 74,500 61,000 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? Complete this question by entering your answers in the tabs below. Required Required Required A B C Compute each project's net present value. (Round your final answers to the nearest dollar.) Present Net Cash Flows Present Value of 1 Value of Net at 8% Cash Flows Project X1 Year 1 Year 2 Year 3 Totals $ 0 $ 0 Initial investment Net present $ 0 value Project X2 Year 1 Year 2 Year 3 Totals $ 0 $ 0 Initial investment Net present value $ 0 < Required A Required B > Complete this question by entering your answers in the tabs below. Required Required Required A B Compute each project's profitability index. Project X1 Project X2 Profitability Index Profitability Numerator: Denominator: = Index Profitability = index 0 0 < Required A Required C > Complete this question by entering your answers in the tabs below. Required Required Required A B C If the company can choose only one project, which should it choose on the basis of profitability index? If the company can choose only one project, which should it choose on the basis of profitability index? < Required B Required C >
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