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.) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(170,325) Project B $(157,960) 45,000 40,000 57,000 44,000 75,295 66,000 88,400 68,000 67,000 23,000 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? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value. Initial Investment Chart Values are Based on: Project A $ 170,325 1= 10% Year Cash Inflow x PV Factor Present Value 1 45,000 x 2 57,000 x 3 75,295 x 4 88,400 x = 5 67,000 x Present value of cash inflows Present value of cash outflows Net present value Initial Investment Project B $ 157,960 Year Cash Inflow PV Factor Present Value 1 40,000 x < Prev 8 of 11 Next >

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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O tableb-1.JPG (788x519)
O tableb-1.JPG (788×519)
E Google Docs
Jestion 8 - Chapter 24 Requi x
- ezto.mheducation.com/ext/map/index.html?_con3con&external_browser%=0&launchUrl=https%253A%252F%252... Q i
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24 Required Homework A
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?
Complete this question by entering your answers in the tabs below.
Required A
Required B
26
For each alternative project compute the net present value.
Project A
Initial Investment
170,325
Chart Values are Based on:
10 %
Cash Inflow
PV Factor
Present Value
%3D
Year
45,000
%3D
1
57,000 x
3
75,295 >
88,400 x
%3D
4
ces
5
67,000 x
Present value of cash inflows
Present value of cash outflows
Net present value
Project B
157,960
Initial Investment
$
PV Factor
Present Value
%3D
Year
Cash Inflow
%3D
1
40,000 x
%3D
44,000 x
66,000 x
%3D
3
68,000 x
%3D
4
5
23,000 x
%3D
Reauired B>
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Transcribed Image Text:File Edit View History Bookmarks People Window Help O tableb-1.JPG (788x519) O tableb-1.JPG (788×519) E Google Docs Jestion 8 - Chapter 24 Requi x - ezto.mheducation.com/ext/map/index.html?_con3con&external_browser%=0&launchUrl=https%253A%252F%252... Q i Saved Help 24 Required Homework A 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? Complete this question by entering your answers in the tabs below. Required A Required B 26 For each alternative project compute the net present value. Project A Initial Investment 170,325 Chart Values are Based on: 10 % Cash Inflow PV Factor Present Value %3D Year 45,000 %3D 1 57,000 x 3 75,295 > 88,400 x %3D 4 ces 5 67,000 x Present value of cash inflows Present value of cash outflows Net present value Project B 157,960 Initial Investment $ PV Factor Present Value %3D Year Cash Inflow %3D 1 40,000 x %3D 44,000 x 66,000 x %3D 3 68,000 x %3D 4 5 23,000 x %3D Reauired B> < Prev 8 of 11 Next >
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stion 8 - Chapter 24 Requix
O tableb-1.JPG (788×519)
tableb-1.JPG (788x519)
E Google Docs
ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252... Q ☆
Required Homework A
Saved
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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
$(170,325)
Project B
$(157,960)
Initial investment
Expected net cash flows in:
Year 1
45,000
57,000
75,295
88,400
67,000
40,000
44,000
66,000
68,000
23,000
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?
Complete this question by entering your answers in the tabs below.
Required A
Required B
For each alternative project compute the net present value.
Project A
Initial Investment
%24
170,325
Chart Values are Based on:
i =
10
%
Year
Cash Inflow
PV Factor
Present Value
45,000 x
57,000 x
1
%3D
%3D
75,295 x
%3D
88,400 x
%3D
67,000 x
%3D
Present value of cash inflows
Present value of cash outflows
Net present value
Project B
Initial Investment
%24
157,960
Year
Cash Inflow
PV Factor =
Present Value
1
40,000 x
< Prev
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Transcribed Image Text:ile Edit View History Bookmarks People Window Help stion 8 - Chapter 24 Requix O tableb-1.JPG (788×519) tableb-1.JPG (788x519) E Google Docs ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252... Q ☆ Required Homework A Saved Help Save 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 $(170,325) Project B $(157,960) Initial investment Expected net cash flows in: Year 1 45,000 57,000 75,295 88,400 67,000 40,000 44,000 66,000 68,000 23,000 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? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value. Project A Initial Investment %24 170,325 Chart Values are Based on: i = 10 % Year Cash Inflow PV Factor Present Value 45,000 x 57,000 x 1 %3D %3D 75,295 x %3D 88,400 x %3D 67,000 x %3D Present value of cash inflows Present value of cash outflows Net present value Project B Initial Investment %24 157,960 Year Cash Inflow PV Factor = Present Value 1 40,000 x < Prev 8 of 11 Next >
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