Questions by farmstrong - Page 5
Following is information on two alternative investments being considered by Jolee Company. 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.)project a project bInitial investment $(172,325) $ (145,96) Expected net cash flows in: Year 1 41,000 27,000 Year 2 47,000 52,000 Year 3 85,295 50,000 Year 4 86,400 71,000 Year 5 56,000 28,000 a. For each alternative project compute the net present value.b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose?