A)

Sweet Tooth Candy Company has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows:

	Carolina		Jersey
Total present value of net cash flow	$247,170		$253,000
Less amount to be invested	231,000		275,000
Net present value	$16,170		$(22,000)

a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places.

	Carolina	Jersey
Total present value of net cash flow	$fill in the blank 1	$fill in the blank 2
Amount to be invested	$fill in the blank 3	$fill in the blank 4
Present value index	fill in the blank 5	fill in the blank 6

b. Which location does your analysis support?

B)

Internal Rate of Return Method

The internal rate of return method is used by Queen Bros. Construction Co. in analyzing a capital expenditure proposal that involves an investment of $41,210 and annual net cash flows of $13,000 for each of the four years of its useful life.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round your answer to three decimal places. fill in the blank 1

b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal.