Problem 4-1 The Riverside Company is evaluating two mutually exclusive assets: Black and White, at the end of 2020. The firm's weighted average cost of capital is 8%. Data for each project are as...

Extracted text: Problem 4-1 The Riverside Company is evaluating two mutually exclusive assets: Black and White, at the end of 2020. The firm's weighted average cost of capital is 8%. Data for each project are as follows: Black White 25,000 Cost of investment-end $43,000 Cost of investment-end 2020 2020 Cash inflow-2021 8,000 Cash inflow-2021 20,000 Cash inflow-2022 8,000 Cash inflow-2022 30,000 Cash inflow-2023 8,000 Cash inflow-2023 10,000 Cash inflow-2024 8,000 Cash inflow-2024 Cash inflow-2025 8,000 Cash inflow-2025 Requirements: • Compute the net present value for each asset using Excel's NPV function. • Determine which project the Riverside Company should invest in based on NPV. Compute the profitability index for each project. • Determine which project the Riverside Company should invest in based on the profitability index. • Should the firm invest in the Black or White project? What is the basis for your choice?