Question: help please Exercise 11-10 (Algo) Net present value, unequal cash flows, and profitability index LO P3 Following is information on two alternative investment projects being


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 7% return from its investments. (PV of \$1. EV of \$1. PVA of \$1, and EVA of \$1) (Use appropriate factor(s) from the tables provided.) 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. \begin{tabular}{|l|l|l|l|} \hline & NetCashFlows & PresentValueof1at7% & PresentValueofNetCashFlows \\ \hline Project X1 & & & \\ \hline Year 1 & $48,000 & & \\ \hline Year 2 & 58,500 & & \\ \hline Year 3 & & & \\ \hline Totals & $106,500 & & $ \\ \hline Initial investment & & & \\ \hline Net present value & & & \\ \hline Project X2 & & & \\ \hline Year 1 & & & \\ \hline Year 2 & & & \\ \hline Year 3 & & & \\ \hline Totals & $ & 0 & \\ \hline Initial investment & & & \\ \hline Net present value & & & $ \\ \hline \end{tabular} Compute each project's profitability index
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
