Project A | ||||||
Intial investment | $175,325 | |||||
Chart values are based on | ||||||
I = 10% | ||||||
Years | Cash inflow | x | PV Factor | = | Present value | |
1 | $38,000 | x | 0.90909 | = | $34,545.42 | |
2 | $48,000 | x | 0.82645 | = | $39,669.60 | |
3 | $86,295 | x | 0.75131 | = | $64,834.30 | |
4 | $78,400 | x | 0.68301 | = | $53,547.98 | |
5 | $60,000 | x | 0.62092 | = | $37,255.20 | |
$229,852.50 | ||||||
Present values of cash inflows | $229,852.50 | |||||
Present values of cash outflows | $175,325 | |||||
Net Present value | $54,527.50 | |||||
Project B | ||||||
Intial investment | $144,960 | |||||
Chart values are based on | ||||||
I = 10% | ||||||
Years | Cash inflow | x | PV Factor | = | Present value | |
1 | $27,000 | x | 0.90909 | = | $24,545.43 | |
2 | $60,000 | x | 0.82645 | = | $49,587.00 | |
3 | $49,000 | x | 0.75131 | = | $36,814.19 | |
4 | $66,000 | x | 0.68301 | = | $45,078.66 | |
5 | $24,000 | x | 0.62092 | = | $14,902.08 | |
$170,927.36 | ||||||
Present values of cash inflows | $170,927.36 | |||||
Present values of cash outflows | $144,960 | |||||
Net Present value | $25,967.36 | |||||
Profitability Index | ||||||
Present values of cash inflows | / | Initial Investment | = | Profitability Index | ||
Project A | $229,852.50 | / | $175,325 | = | 1.31 | |
Project B | $170,927.36 | / | $144,960 | = | 1.18 | |
Which project to choose | A |
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Exercise 11-10 NPV and profitability index LO P3 Following is information on two alternative investments being...
Exercise 24-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% retur 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 $(180,325) Project B $(145,960) Initial investment Expected net cash flows in year: Hm #on 47,000 57,900 81,295 77,400 69,000 37,000 60,000 49,000 74,000 32,000 a. For each alternative project...
Exercise 24-10 NPV and profitability index LO P3 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 $ (181,325 ) $ (159,960 ) Expected net cash flows in year: 1 48,000 35,000 2 44,000 47,000 3 85,295 63,000 4 93,400 84,000...
Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% 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 $ (178,325 ) $ (144,960 ) Expected net cash flows in: Year 1 53,000 36,000 Year 2 59,000 52,000 Year 3 92,295 52,000 Year 4 95,400 70,000 Year 5 57,000 31,000 a. For...
Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% 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 $ (182,325) Project B $ (144,960) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 54,000 47,000 91,295 85,400 60,000 42,000 55,000 67,000 83,000 29,000 a. For each alternative...
Exercise 24-11 Net present value, profitability index LO P3 Following is information on two alternative investments being considered by Tiger Co. The company requires a 6% 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 $ (84,000) Project X2 $ (128,000) Initial investment Expected net cash flows in year: 27,000 37,500 62,500 63,000 53,000 43,000 a. Compute each project's net present value. b....
Seved Ch 11 Ex 11-10 Exercise 11-10 NPV and profitability index LO P3 Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return from its investments. (EV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) 20 points Project B $(154,960) Project A $(178, 325) Initial investment eBook Expected net cash flows in: Year 1 Year 2 Year 3 36,000 40,000 84,295...
Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% 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 $(182,325) Project B $(144,960) Initial inve stment Expected net cash flows in: Year 1 54,000 47,000 91,295 85,400 60,000 42,000 55,000 Year 2 67,000 83,000 29,000 Year 3 Year 4 Year 5 a. For each alternative project...
Exercise 24-12 Net present value, profitability index LO P3 Following is information on two alternative investments being considered by Tiger Co. The company requires an 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 x1 Project x2 Initial investment $(108,000) $(176,000) Expected net cash flows in year: 39,000 81,000 49,500 71,000 74,500 61,000 1 2 3 a. Compute each project's net present value....
Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return from its investments, PV of $1. EV of $1. PVA of $1. and FVA O $(Use appropriate factor(s) from the tables provided) Project Project Initial investment 5[177,325) 5(151.960) Expected net cash flows in ytar: 50.000 53,000 42,00 76,205 56.000 94,400 56,000 20.000 21. 1 a. For each alternative project compute the nel present value. b. For each alternative project compute the profitability...
11-10 Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% 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 $ (151,960) Initial investment Expected net cash flows in year: (173,325) 51,000 55,000 72,295 78,400 66,000 36,000 59,000 65,000 85,000 32,000 a. For each alternative project compute the net present value b. For each...