Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects $\begin{array}{lcc}
&\text {Project A}&\text {Project B}\
\text { Useful life } & 5 \text { Years } & 5 \text { Years } \
\text { Present value of cash inflows } & \$ 84,360 & \$ 55,100 \
\text { Present value of cash outflows } & \$ 77,000 & \$ 49.000
\end{array}$ What is the present value index for Project A?

Question

Quizplus · Accepted Answer

The present value index (PVI) is calculated by dividing the present value of cash inflows by the present value of cash outflows. For Project A, the PVI is $84,360/$77,000 = 1.096.

Findell Corporation Is Considering Two Projects, a and B, and It