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Exercise 24-11 Net present value, profitability index LO P3 Following is information on two alternative investments being considered by Tiger Co. The company requires an 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.) Initial investment Expected net cash flows in year: Project X1 $ (88,000) Project X2 $(136, eee) 29,000 39,500 64,5ee 66,000 56,000 46,880 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 8% Present Value of Net Cash Flows Project X1 Year 1 Year 2 PS 29,000 39,500 64,500 $ 133,000 Totals $ a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of 1 at 8% Present Value of Net Cash Flows Project X1 $ 29,000 39,500 64,500 133,000 Year 3 Totals Amount invested Net present value Project X2 Year 1 Year 2 Year 3 Totals Amount invested Net present value $ 66,000 56,000 46,000 $ 168,000 (Required A Required B > Following is information on two alternative investments being considered by Tiger Co. The company requires an 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.) Initial investment Expected net cash flows in year: Project x1 $ (88,880) Project X2 $(136,000) 29,000 39,500 64,500 66,000 56,000 46,000 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's profitability Index. If the company can choose only one project, which should it choose? Profitability Index Choose Denominator: Choose Numerator: = = Profitability Index Profitability index Project X1 Project X2 If the company can choose only one project, which should it choose?

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