4. Present Value Index

eBook Print Item Present Value Index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $241,080 $301,790 Amount to be invested (246,000) (293,000) Net present value $(4,920) $8,790 Des Moines a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Cedar Rapids Total present value of net cash flow Amount to be invested Present value Index b. Which location does your analysis support? (if both present value indexes are the same, either location will grade as correct.) because the net present value index is 1