Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 9% return from its investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Net cash flows ins Year 1 Year 2 Project XI $ (96,000) 33,000 43500 Project x2 $ (141,000) 72,000 52.000
Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 9% return from its investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Net cash flows ins Year 1 Year 2 Project XI $ (96,000) 33,000 43500 Project x2 $ (141,000) 72,000 52.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 24-11 (Algo) Net present value, unequal cash flows, and profitability index LO P3
Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 9%
return from its investments. (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.)
Initial investment
Net cash flows in:
Project X1
Year 1
Year 1
Year 2
Year 3
Year 2
Year 3
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?
Totals
initial inconstat
Project X1
$(96,000)
Complete this question by entering your answers in the tabs below.
$
33,000
43,500
68,500
Required A Required B
Compute each project's net present value. (Round your answers to the nearest whole dollar.)
Net Cash
Flows
Present Value of Present Value of
1 at 9%
Net Cash Flows
Project x2
$(141,000)
0
72,000
62,000
52,000
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