Sweet Tooth Candy Company has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Carolina Jersey Total present value of net cash flow $231,360 $301,350 Less amount to be invested 241,000 287,000 Net present value $(9,640) $14,350 a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places. Jersey Total present value of net cash flow Amount to be invested Present value index b. Which location does your analysis support? Carolina

Sweet Tooth Candy Company has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Carolina Jersey Total present value of net cash flow $231,360 $301,350 Less amount to be invested 241,000 287,000 Net present value $(9,640) $14,350 a. Determine the present value index for each proposal. Round your answer for the present value index to two decimal places. Jersey Total present value of net cash flow Amount to be invested Present value index b. Which location does your analysis support? Carolina

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Description: Subject: acounting Present Value IndexSweet Tooth Candy Company has computed the net present value for capital expenditure at two locations. Relevant data related to thecomputation are as follows:JerseyTotal present value of net cash flow$231,360$301

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 12E

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