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Following is information on two alternative investment projects being considered by Tiger Company. The compa requires a 5% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate facto from the tables provided.) Initial investment Net cash flows in: Year 1 Year 2 Year 3 Required A Project X1 Year 1 Year 2 Year 3 Totals Initial investment Net present value Project X2 Year 1 Year 2 Year 3 Totals Initial investment Net present value Project X1 $ (112,000) 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? $ 41,000 51,500 76,500 Complete this question by entering your answers in the tabs below. Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of Net Cash Flows 0 Present Value of 1 at 5% Project X2 $ (184,000) $ 84,000 74,000 64,000 $ $ 0 0

Following is information on two alternative investment projects being considered by Tiger Company. The compa requires a 5% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate facto from the tables provided.) Initial investment Net cash flows in: Year 1 Year 2 Year 3 Required A Project X1 Year 1 Year 2 Year 3 Totals Initial investment Net present value Project X2 Year 1 Year 2 Year 3 Totals Initial investment Net present value Project X1 $ (112,000) 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? $ 41,000 51,500 76,500 Complete this question by entering your answers in the tabs below. Required B Required C Compute each project's net present value. (Round your final answers to the nearest dollar.) Net Cash Flows Present Value of Net Cash Flows 0 Present Value of 1 at 5% Project X2 $ (184,000) $ 84,000 74,000 64,000 $ $ 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Following is information on two alternative investment projects being considered by Tiger Company. The compa requires a 5% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor from the tables provided.) Initial investment Net cash flows in: Required A Project X1 Year 1 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? Year 2 Year 3 Complete this question by entering your answers in the tabs below. Totals Initial investment Net present value Project X2 Year 1 Year 1 Year 2 Year 3 Year 2 Year 3 Totals Initial investment Net present value Required B Compute each project's net present value. (Round your final answers to the nearest dollar.) Present Value of Net Cash Flows Net Cash Flows $ Project X1 $ (112,000) $ 41,000 51,500 76,500 Required C 0 Present Value of 1 at 5% $ Project X2 $ (184,000) $ 84,000 74,000 64,000 $ $ 0 0 0 0
Transcribed Image Text:Following is information on two alternative investment projects being considered by Tiger Company. The compa requires a 5% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor from the tables provided.) Initial investment Net cash flows in: Required A Project X1 Year 1 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? Year 2 Year 3 Complete this question by entering your answers in the tabs below. Totals Initial investment Net present value Project X2 Year 1 Year 1 Year 2 Year 3 Year 2 Year 3 Totals Initial investment Net present value Required B Compute each project's net present value. (Round your final answers to the nearest dollar.) Present Value of Net Cash Flows Net Cash Flows $ Project X1 $ (112,000) $ 41,000 51,500 76,500 Required C 0 Present Value of 1 at 5% $ Project X2 $ (184,000) $ 84,000 74,000 64,000 $ $ 0 0 0 0
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% 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 Net cash flows in: Year 1 Year 2 Year 3 Project X1 $ (112,000) Project X1 Project X2 41,000 51,500 76,500 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? Required A Required B Required C Compute each project's profitability index. index. Numerator: Project X2 $ (184,000) Complete this question by entering your answers in the tabs below. 84,000 74,000 64,000 Profitability Index Denominator: < Required A M Profitability Index m Profitability index Required C > Complete this question by entering your answers in the tabs below. 0 0 Required A Required B Required C If the company can choose only one project, which should it choose on the basis of profitability index? If the company can choose only one project, which should it choose on the basis of profitability index? < Required B Required C >
Transcribed Image Text:Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% 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 Net cash flows in: Year 1 Year 2 Year 3 Project X1 $ (112,000) Project X1 Project X2 41,000 51,500 76,500 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? Required A Required B Required C Compute each project's profitability index. index. Numerator: Project X2 $ (184,000) Complete this question by entering your answers in the tabs below. 84,000 74,000 64,000 Profitability Index Denominator: < Required A M Profitability Index m Profitability index Required C > Complete this question by entering your answers in the tabs below. 0 0 Required A Required B Required C If the company can choose only one project, which should it choose on the basis of profitability index? If the company can choose only one project, which should it choose on the basis of profitability index? < Required B Required C >
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