Present value index

Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows:

Line Item Description Des Moines Cedar Rapids

Total present value of net cash flow $$712,500$ $$848,000$

Amount to be invested $(750,000)(800,000)$

Net present value $$(37,500)$ $ $48,000$

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

Line Item Description Des Moines Cedar Rapids

Total present value of net cash flow $fill in the blank $1$

$fill in the blank $2$

Amount to be invested fill in the blank $3$

fill in the blank $4$

Present value index fill in the blank $5$

fill in the blank $6$

b$.$ Which location does your analysis support?

$,$ because the net present value index is

$1.$