What is the present value index of the project

Assignment Help Managerial Accounting
Reference no: EM133047043

Question - Present Value Index - Let's look at an example of how to determine the present value index. When funds for capital investments are limited, projects can be ranked using a present value index. A project with a negative net present value will have a present value index below 1.0. Also, it is important to note that a project with the largest net present value may, in fact, return a lower present value per dollar invested.

The company has a project with a 5-year life, an initial investment of $170,000, and is expected to yield annual cash flows of $57,500. What is the present value index of the project if the required rate of return is set at 10%?

Reference no: EM133047043

Questions Cloud

What was the percentage of completion : The following information related to a project that was started last year at a contract price of P20M. What was the percentage of completion
What is the equivalent single rate of discount : What is the equivalent single rate of discount that was allowed? Give your answer in percentage to the nearest 100th
How distribute and integrative negotiations are different : Please explain how distribute and integrative negotiations are different from one another. And provide examples
Explain the meaning of conflict in negotiation : Explain the meaning of Conflict in negotiation. What are the different levels of conflict? Is conflict always a bad thing? Please give valid reasons.
What is the present value index of the project : The company has a project with a 5-year life, an initial investment of $170,000, What is the present value index of the project
Critical infrastructure and key resources : Discuss the vulnerabilities to America's various areas of critical infrastructure and key resources.
Implementing strategies to achieve : Top executives and members of a corporation's board of directors have different roles and responsibilities. Traditionally, executives have been responsible for
International negotiations and domestic negotiations : What is this difference between cross-cultural/international negotiations and domestic negotiations?
Organizations slated with protection : Discuss the various organizations slated with the protection of the United States and its interests.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd