Present Value Index

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	$882,000	$1,050,000
Amount to be invested	900,000	750,000

a. Determine the present value index for each proposal. Round to two decimal places.

	Present Value Index
Billings Location . ________
Great Falls Location . _________

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