Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projectsProject AProject BUseful life5 years5 yearsPresent value of cash inflows$84,440$53,300Present value of cash outflows$79,000$46,000What is the present value index for Project A?Multiple Choice1.0690.8621.0970.886

Present Value Index: It represents the ratio of the project's net present value to the initial cost…

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What is the present value index for Project A?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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Question

Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects
Project A
Project B
Useful life
5 years
5 years
Present value of cash inflows
$84,440
$53,300
Present value of cash outflows
$79,000
$46,000
What is the present value index for Project A?
Multiple Choice
1.069
0.862
1.097
0.886

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