I'm having a hard time trying to find the present index value. I know the formula but not sure how to find total present value of net cash flow.

View History Bookmarks Window Help EDSun v2.cengagenow.com C CengageNOWv2 | Online teaching and learning resource from Cengage Lear. C ae8b26e5-01e2-4c8f-8a5a-89164a2471db.gif 651x259 pixel Week 5 CNOW Assignment Calculator Part Three Present Value Index When funds for capital investments are limited, projects can be ranked using a present value index. A project with a negative net present value will have a present value inde below 1.0. Also, it is important to note that a project with the largest net present value may, in fact, return a lower present value per dollar invested. Let's look at an example of how to determine the present value index. The company has a project with a 5-year life, an initial investment of $170,000, and is expected to yield annual cash flows of $57,000. Whathat is the present value index of the project if the required rate of return is set at 6%? Total present value of net cash flows Present value index Initial investment Calculation Steps Note: Round total present value of net cash flows and initial investment to nearest dollar. Round present value index to two decimal places. Present value index = $ 170,000 Feedback Check My Work To calculate the total present value of net cash flows, find the correct present value discount factor. Then multiply it by the annual cash flow for the project. Check My Work