Following is information on two alternative Investment projects being considered by Tiger Company. The company requires a 7% return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 $ (126,000) 48,000 58,500 83,500 Project X2 $ (212,000) 94,500 84,500 74,500 a. Compute each project's net present value. b. Compute each project's profitability Index. c. If the company can choose only one project, which should it choose on the basis of profitability Index?
Following is information on two alternative Investment projects being considered by Tiger Company. The company requires a 7% return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 $ (126,000) 48,000 58,500 83,500 Project X2 $ (212,000) 94,500 84,500 74,500 a. Compute each project's net present value. b. Compute each project's profitability Index. c. If the company can choose only one project, which should it choose on the basis of profitability Index?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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228.
Subject : - Accounting .
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