Following is information on two alternative investment projects being considered by Tiger Company. The company...
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Accounting
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
Project X2
Initial investment
$ (84,000)
$ (128,000)
Net cash flows in:
Year 1
27,000
63,000
Year 2
37,500
53,000
Year 3
62,500
43,000
a. Compute each projects net present value. b. Compute each projects profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index?
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