Question
present value index
Present Value Inde:x Dip N' Dunk Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Ft. Collins Boulder Total present value of net cash flow Amount to he invested Net present value a. Determine the present value index for each proposal. Round your answer far the present value index to two decimal places. $237,120 308,700 (247,000) (294,000) 14,700 (9,880) Ft. Collins Boulder Total present value of net cash flow Amount to be inwested Present value index b. Which location does your analys s support? (If both present value indexes are the same, either location will grade as correct.) , because the net present value index is
Explanation / Answer
a) Ft.Collins Boulder total present value of net cash flows 237,120 308,700 amount to be invested 247,000 294,000 present value of index 0.96 1.05 b) Boulder because the net present value index is 1.05
