Determine the present value index for each proposal

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Question - Montana Grill has computed the net present value for capital expenditures for the Billings and Great Falls locations using the net present value method. Relevant data related to the computation are as follows:

 

Billings

Great Falls

Total present value of net cash flow

$182,360

$232,960

Amount to be invested

188,000

224,000

Required -

a. Determine the present value index for each proposal.

b. If Montana Grill can fund only one location, which location should be funded?

Reference no: EM133189080

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