Shenandoah Springs Company is considering two investment opportunities whose cash flows are provided below: Year Investment A Investment B $(16,000) 5,360 5,360 5,360 4,320 $(10,200) 5,360 4,320 3,440 1 4 1,480 The company's hurdle rate is 8%. What is the present value index of Investment B? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round your answer to two decimal points.)
Shenandoah Springs Company is considering two investment opportunities whose cash flows are provided below: Year Investment A Investment B $(16,000) 5,360 5,360 5,360 4,320 $(10,200) 5,360 4,320 3,440 1 4 1,480 The company's hurdle rate is 8%. What is the present value index of Investment B? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round your answer to two decimal points.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Shenandoah Springs Company is considering two investment opportunities whose cash flows are provided below:
Year
Investment A
Investment B
$(16,000)
5,360
5,360
5,360
$(10,200)
5,360
1
4,320
3,440
1,480
4,320
The company's hurdle rate is 8%. What is the present value index of Investment B? (PV of $1 and PVA of $1) (Use appropriate factor(s)
from the tables provided. Do not round your intermediate calculations. Round your answer to two decimal points.)
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