Present value indexTasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant datarelated to the computation are as follows:Des MoinesCedar RapidsTotal present value of net cash flow$321,300$342,160Amount to be investedNet present value(306,000)(364,000)$15,300$(21,840)a. Determine the present value index for each proposal. Round your answers for the present value indexto two decimal places.Des MoinesCedar RapidsTotal present value of net cash flowAmount to be investedPresent value indexb. Which location does your analysis support? (If both present value indexes are the same, either location willgrade as correct.)because the net present value index is1.

Determine the answers for parts (a) and (b) using Excel as follows:Formula sheet:Note:To understand…

Answered: Present value index Tasty Doughnuts has…

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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sent value index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Total present value of net cash flow Amount to be invested Net present value Des Moines Cedar Rapids $192,610 $214,080 (187,000) $5,610 (223,000) $(8,920) a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Total present value of net cash flow Amount to be invested Des Moines Cedar Rapids Present value index b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) , because the net present value index is 1.
Present Value Index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $252,720 $274,550 Amount to be invested (243,000) (289,000) Net present value $9,720 $(14,450) a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Des Moines Cedar Rapids Total present value of net cash flow Amount to be invested $ $ Present value index b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) v, because the net present value index is 1.
Present value index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids $277,680 (267,000) $10,680 Total present value of net cash flow Amount to be invested Net present value a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Total present value of net cash flow Amount to be invested Present value index $302,100 (318,000) $(15,900) I Des Moines b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) 1. Cedar Rapids because the net present value index is
Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $194,880 $254,100 Amount to be invested (203,000) (242,000) Net present value $(8,120) $12,100 a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Des Moines Cedar Rapids 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.) , because the net present value index is 1.
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
Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $ 712,500 (750,000) $(37,500) $ 848,000 (800,000) $ 48,000 Amount to be invested Net present value a. Determine the present value index for each proposal. - Which location does your analysis support? Explain. b.
Present Value Index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $712,500 $848,000 Amount to be invested (750,000) (800,000) Net present value $(37,500) $ 48,000 a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Des Moines Cedar Rapids 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?Des Moines , because the net present value index is greater than 1.
Net present value method, present value index, and analysis for a service company First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value table appearing in Exhibit 2 of this chapter. 2. Determine a present value index for each project. (Round to two decimal places.) 3. Which project offers the largest amount of present value per dollar of investment? Explain.
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 dec 2. Rank the proposals in terms of preference. Propoza! A B C D COLONINST Index $(60,000) $(130,000) $(140,000) $(2,100,000) 86,600 181,100 213,900 2,803, 200 703,200 $ 26,600 $ 51,100 $ 73,900 $ 5 years 7 years 6 years 6 years Kana Preference Q Search k < Prev D 4 of 7 SUS N THE
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project 4 Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal A BUD C Project Profitability Index Investment Proposal A D $(106,000) $(116,000) $(86,000) $(144,000) 142,040 178,640 118,680 213,120 $36,048 $ 62,640 $ 32,680 $ 69,120 5 years 7 years years 6 years Rank Preference:
Information on four investment proposals is given below: Investment required. Present value of cash inflows Net present value. Life of the project Investment Profitability. Index Proposal A 8 C D A $ (790,000) 1,121,300 $ 331,300 Rank Preference 5 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal $ (120,000) 182,000 $ 62,000 B $ (120,000) 168,300 $ 48,300 7 years 6 years D $ (1,820,000) 2,427,200 $ 607,200 6 years
Information on four investment proposals is given below: Investment required. Present value of cash inflows Net present value Life of the project Investment Proposal Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. A B C D Profitability Index A $ (150,000) 211,500 $ 61,500 Rank Preference 5 years Investment Proposal B $ (200,000) 275,600 $ 75,600 7 years с $ (180,000) 274,100 $ 94,100 6 years D $ (2,600,000) 3,470,500 $ 870,500 6 years

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