Question
Mountain Brook Company is considering two investment opportunities whose cash flows are provided below: Year Investment A Investment B 0 $ (15,000) $ (9,000) 1
Mountain Brook Company is considering two investment opportunities whose cash flows are provided below:
| Year | Investment A | Investment B | ||
| 0 | $ | (15,000) | $ | (9,000) |
| 1 | 5,000 | 5,000 | ||
| 2 | 5,000 | 4,000 | ||
| 3 | 5,000 | 3,000 | ||
| 4 | 4,000 | 1,000 |
The company's hurdle rate is 12%. What is the present value index of Investment A? (Do not round your PV factors and intermediate calculations.)
Multiple Choice
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1.01
-
1.00
-
0.97
-
None of these answers is correct.
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Auditing and Assurance services an integrated approach
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
15th edition
978-0133125634, 9780133423815, 133125637, 133423816, 978-0133125689
