The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals:

	Project A		Project Z
Amount of investment	$36,000			$20,000
Useful life	4 years			5 years
Estimated residual value	0			0
Estimated total income over the useful life	$4,680			$5,000

Determine the expected average rate of return for each project. Round your answers to one decimal place.

Project A	fill in the blank 1%
Project Z	fill in the blank 2%

Janes Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $175,000 and each with an eight-year life and expected total net cash flows of $280,000. Location 1 is expected to provide equal annual net cash flows of $35,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1	$68,000
Year 2	51,000
Year 3	33,000
Year 4	23,000
Year 5	37,000
Year 6	29,000
Year 7	21,000
Year 8	18,000

Determine the cash payback period for both location proposals.

Location 1	12345678 years
Location 2	12345678 years

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

	Des Moines		Cedar Rapids
Total present value of net cash flow	$193,640		$215,040
Amount to be invested	(188,000)		(224,000)
Net present value	$5,640		$(8,960)

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

	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? (If both present value indexes are the same, either location will grade as correct.)

Des MoinesCedar Rapids

, because the net present value index is

less thangreater than

1.