Present Value Index Dip N’ Dunk Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Fort Collins Boulder Total present value of net cash flow $226,980 $289,120 Amount to be invested (234,000) (278,000) Net present value $(7,020) $11,120 a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places. Fort Collins Boulder 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.) Fort Collins
Present Value Index Dip N’ Dunk Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Fort Collins Boulder Total present value of net cash flow $226,980 $289,120 Amount to be invested (234,000) (278,000) Net present value $(7,020) $11,120 a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places. Fort Collins Boulder 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.) Fort Collins
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Present Value Index
Dip N’ Dunk Doughnuts has computed the
| Fort Collins | Boulder | |||
| Total present value of net |
$226,980 | $289,120 | ||
| Amount to be invested | (234,000) | (278,000) | ||
| Net present value | $(7,020) | $11,120 |
a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places.
| Fort Collins | Boulder | |
| 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.)
Fort Collins
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