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 $325,420 $339,450 Amount to be invested (307,000) (365,000) Net present value $18,420 $(25,550) 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 $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? (If both present value indexes are the same, either location will grade as correct.), because the net present value index is 1.
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 $325,420 $339,450 Amount to be invested (307,000) (365,000) Net present value $18,420 $(25,550) 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 $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? (If both present value indexes are the same, either location will grade as correct.), because the net present value index is 1.
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.57TI: What is the total effect on the economy of a government tax rebate of $1,000 to each household in...
Question
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 | $325,420 | $339,450 | ||
| Amount to be invested | (307,000) | (365,000) | ||
| Net present value | $18,420 | $(25,550) |
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 | $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? (If both present value indexes are the same, either location will grade as correct.), because the net present value index is 1.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you