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Determine the present value index for each proposal

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Problem - Present value index - Dippin' Doughnuts has computed the net present value for capital expenditures at two locations. Relevant data related to the computation are as follows:

 

Mason City

Cedar Rapids

Total present value of net cash flow

$455,900

$565,760

Amount to be invested

485,000

544,000

Net present value

$ (29,100)

$ 21,760

Required -

a. Determine the present value index for each proposal.

b. Which location does your analysis support?

Reference no: EM132690471

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