Drive By Doughnuts has computed the net present value for capital expenditure locations A and B, using the net present value method. Relevant data related to the computation are as follows:
|
|
Location A |
Location B |
|
Total present value of net cash flow |
$306,280 |
$177,660 |
|
Amount to be invested |
322,400 |
164,500 |
|
Net present value |
$ (16,120) |
$ 13,160 |
Determine the present value index for each proposal.