Answer Happy

Following is information on two alternative investments, Beachside Resort is considering building a new pool or spa. The company requires a 10% 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.) Pool Spa $ (160,000) $ (105,000) Initial investment Net cash flows in: Year 1 40,000 32,000 Year 2 56,000 50,000 80,295 66,000 Year 3 Year 4 90,400 72,000 Year 5 65,000 24,000 a. For each investment project compute the net present value. b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Req A Req B and C For each alternative project compute the net present value.
Year 1 40,000 32,000 Year 2 56,000 50,000 Year 3 80,295 66,000 90,400 72,000 Year 4 Year 5 65,000 24,000 a. For each investment project compute the net present value. b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Req A Req B and C For each alternative project compute the net present value. Pool Net Cash Flows Present Value Present Value of Net Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Present Value x Present Value = of Net Cash Flows = T W W Totals Spa Year 1 Year 2 Year 3 Year 4 Year 5 Totals $ Net Cash Flows S
Exercise 26-12 (Static) Net present value, unequal cash flows, profitability index, and service company LO P3 Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% 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.) Pool Spa Initial investment $ (160,000) $ (105,000) Net cash flows int Year 1 40,000 32,000 Year 2 56,000 50,000 Year 3 80,295 66,000 Year 4 90,400 72,000 Year 5 65,000 24,000 a. For each investment project compute the net present value. b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Req A Req B and C b. For each alternative project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Profitability Index Numerator: Denominator: 1 Pool Spa If the company can only select one project, which should it choose on the basis of profitability index? < Req A Req B and C Profitability index 0 0