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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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:
Â
Â
|
 |
ft. Collins |
 |
Boulder |
 |
|
Total present value of net cash flow |
$607,600 |
 |
$624,000 |
 |
|
Less amount to be invested |
   620,000 |
 |
  600,000 |
 |
|
Net present value |
$(12,400) |
 |
$ Â 24,000 |
 |
Â
a.    Determine the present value index for each proposal.
b.                           Â
Which location does your analysis support? Explain.
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