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
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 |
a. Determine the present value index for each proposal. Round to two decimal places.
| Present Value Index | |
| Billings Location | fill in the blank 1 |
| Great Falls Location | fill in the blank 2 |
b. If Montana Grill can fund only one location, which location should be funded?
Great FallsBillingsGreat Falls
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
7th Edition
0137858515, 9780137858514
