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What is the present value index of investment a

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Question - Mountain Brook Company is considering two investment opportunities whose cash flows are provided below:

Year Investment A Investment B

Year 0 ($15,000) ($9,000)

Year 1 5,000 5,000

Year 2 5,000 4,000

Year 3 5,000 3,000

Year 4 4,000 1,000

The company's hurdle rate is 12%. What is the present value index of Investment A?

A. 0.97

B. 1.00

C. 1.01

D. 1.12

Reference no: EM131796740

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