narubhai Following is information on two alternative investments projects being considered by TigerCompany. The company requires a 15% 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. Project X1 Project X2Initial investment $ (130,000) $ (194,000) Net cash flows in: Year 1 50,000 97,500 Year 2 60,50087,500 Year 3 85,500 77,500 Compute each project's net present value. Compute each project'sprofitability index. If the company can choose only one project, which should it choose on thebasis of profitability index?

1.NPV means Net present value.It is a capital budgeting technique used for making investment…

Answered: Following is information on two…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: Use the information from the previous exercise to calculate the internal rate of return on both projects and make a recommendation on which one to accept. For further instructions on internal rate of return in Excel, see Appendix C.
Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 10% 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 Project X1 $ (98,000) Project X2 $ (144,000) Net cash flows in: Year 1 36,000 76,500 Year 2 46,500 Year 3 71,500 66,500 56,500 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 on the basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. Note: Round your answers to the nearest whole dollar. Net Cash Flows Present Value of 1 at 10% Present Value of Net Cash Flows Project X1 Year 1 $ 36,000 Year 2 46,500 Year 3 71,500 Totals $ 154,000 $ 0 Initial investment Net present value $ Project X2 Year 1 $…
Following is information on two alternative investments projects being considered by Tiger 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 X1 Project X2 Initial investment $ (112,000) $ (170,000) Net cash flows in: Year 1 41,000 84,000 Year 2 51,500 74,000 Year 3 76,500 64,000 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 on the basis of profitability index?
Please complete these charts
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Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 15% 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 Initial investment $ (100,000) Net cash flows in: Year 1 37,000 Year 2 Year 3 47,500 72,500 Project X2 $ (150,000) 78,000 68,000 58,000 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 on th basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your answers to the nearest whole dollar.) Net Cash Present Value of Present Value of Flows 1 at 15% Net Cash Flows Project X1 Year 1 Year 2 Year 3 Totals Initial investment Net present value $ 0 $ 0 $ 0 Project X2 Year 1 Year 2 Year 3 Totals $ 0 $ EA Initial…
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Following is information on two alternative investments being considered by Jolee Company. The company requires a 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.) Project A Project B Initial investment $ (172,325 ) $ (146,960 ) Expected net cash flows in: Year 1 50,000 31,000 Year 2 43,000 44,000 Year 3 89,295 60,000 Year 4 90,400 77,000 Year 5 54,000 33,000 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?
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Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 4% 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 $ (100,000) $ (160,000) Net cash flows in: Year 1 35,000 75,000 Year 2 45,500 65,000 Year 3 70,500 55,000 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?
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 4% 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 $ (110,000) $ (180,000) Net cash flows in: Year 1 40,000 82,500 Year 2 50,500 72,500 Year 3 75,500 62,500 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 investments being considered by Tiger Co. The company requires a 7% 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 $ (106,000 ) $ (172,000 ) Expected net cash flows in: Year 1 38,000 79,500 Year 2 48,500 69,500 Year 3 73,500 59,500 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?

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