Thornton Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternative is $205,000 and $164,000, respectively. The present value of cash inflows and outflows for the second alternative is $380,000 and $302,500, respectively.

Required

1. Calculate the net present value of each investment opportunity. (Negative amounts should be indicated by a minus sign.)

2. Calculate the present value index for each investment opportunity. (Round "PVI" to 2 decimal places.)

3. Indicate which investment will produce the higher rate of return.

a.	Alternative 1 (NPV)
	Alternative 2 (NPV)
b.	Alternative 1 (PVI)
	Alternative 2 (PVI)
c.	The investment that will produce the higher rate of return is