Project AInitial Investment171,325Chart Values are Based on:i =%YearCash InflowPV FactorPresent Value54,000 x45,000 x87,295 x1281,400 x65,000 x4Present value of cash inflowsPresent value of cash outflowsNet present valueProject BInitial Investment159,960YearCash InflowPV FactorPresent Value35,000| x59,000 x55,000 x73,000 x20,000 x12||||3.LO3.4)LO Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% return fromits investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)Project A$(171,325)Project B$(159,960)Initial investmentExpected net cash flows in:35,00059,00055,000Year 154,00045,00087,29581,40065,000Year 2Year 373,00020,000Year 4Year 5a. 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?Complete this question by entering your answers in the tabs below.Required ARequired BFor each alternative project compute the net present value.

Capital budgeting is the technique that is widely used by managers to determine the worth and the…

Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% 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.) Project A $(171,325) Project B $(159,960) Initial investment Expected net cash flows in: Year 1 54,000 45,000 87,295 81,400 65,000 35,000 59,000 55,000 73,000 20,000 Year 2 Year 3 Year 4 Year 5 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?

Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% 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.) Project A $(171,325) Project B $(159,960) Initial investment Expected net cash flows in: Year 1 54,000 45,000 87,295 81,400 65,000 35,000 59,000 55,000 73,000 20,000 Year 2 Year 3 Year 4 Year 5 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?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 11P

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Following is information on two alternative investments being considered by Jolee Company. The company requires a 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 A Project B Initial investment $ (172,325 ) $ (146,960 ) Expected net cash flows in: Year 1 50,000 31,000 Year 2 43,000 44,000 Year 3 89,295 60,000 Year 4 90,400 77,000 Year 5 54,000 33,000 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?
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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 B Initial investment $ (181,325 ) $ (155,960 ) Expected net cash flows in: Year 1 35,000 27,000 Year 2 54,000 43,000 Year 3 77,295 61,000 Year 4 91,400 77,000 Year 5 65,000 20,000 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? For each alternative project compute the net present value. Project A Initial Investment $181,325 Chart Values are Based on: i = % Year Cash Inflow x PV Factor =…
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