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Following is information on two alternative investments being considered by Jolee Company. The company requires a...

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 Project B
Initial investment $ (175,325 ) $ (142,960 )
Expected net cash flows in:
Year 1 40,000 33,000
Year 2 44,000 43,000
Year 3 91,295 57,000
Year 4 88,400 78,000
Year 5 64,000 36,000


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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Answer to Question a:

Answer to Question b:


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