Exercise $10-7$A $($Algo$)$ Using the present value index LO $10-2$

Munoz Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternative is $$175,000$ and $$152,000,$ respectively. The present value of cash inflows and outflows for the second alternative is $$350,000$ and $$287,500,$ respectively.

Required

a$.$ Calculate the net present value of each investment opportunity.

Note: Negative amounts should be indicated by a minus sign.

b$.$ Calculate the present value index for each investment opportunity.

Note: Round "PVI" to $2$ decimal places.

c$.$ Indicate which investment will produce the higher rate of return.

$\backslash$table$[[$a$.$ Alternative $1($NPV$)],[$a$.$ Alternative $2($NPV$)],[$b$.$ Altemative $1($PVI$)],[$b Allemative $2($PVI$)],[$c The investment that will produce the higher rate of return is$]]$Exercise $10-7$A $($Algo$)$ Using the present value index LO $10-2$

Munoz Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternative is $$175,000$ and $$152,000,$ respectively. The present value of cash inflows and outflows for the second alternative is $$350,000$ and $$287,500,$ respectively.

Required

a$.$ Calculate the net present value of each investment opportunity.

Note: Negative amounts should be indicated by a minus sign.

b$.$ Calculate the present value index for each investment opportunity.

Note: Round "PVI" to $2$ decimal places.

c$.$ Indicate which investment will produce the higher rate of return.

$\backslash$table$[[$a$.$ Alternative $1($NPV$)],[$a$.$ Alternative $2($NPV$)],[$b$.$ Altemative $1($PVI$)],[$b Allemative $2($PVI$)],[$c The investment that will produce the higher rate of return is$]]$