Question: 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

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 $232,780 $258,240 Amount to be invested (226,000) (269,000) Net present value $6,780 $(10,760) a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Des Moines 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.) Des Moines , because the net present value index is greater than 1.

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