- Following Is Information On Two Alternative Investment Projects Being Considered By Tiger Company The Company Requires 1 (129.97 KiB) Viewed 60 times
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 $1) (Use appropriate factor(s) from the tables provided.) Project x1 $ (114,000) Project x2 $ (188,000) Initial investment Net cash flows in: Year 1 Year 2 Year 3 42,000 52,500 77,500 85,500 75,500 65,500 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 A Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 6% Present Value of Net Cash Flows $ 42,000 Project X1 Year 1 Year 2 Year 3 Totals 52,500 77,500 $ 172,000 Initial investment Net present value Project X2 Year 1 Year 2 Year 3 $ 85,500 75,500 65,500 $ 226,500 Totals Initial investment Net present value < Required A Required B >
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 A Required B Required c. Compute each project's profitability index. Profitability Index 1 Denominator: Numerator: Profitability Index Profitability index / = 0 Project X1 Project X2 0 < Required A Required C>
Complete this
question by entering your answers in the tabs below. Required A Required B Required 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