Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the project What is the present value index for project A?
$$\begin{array} { | l | l | l | }
\hline & \text { Project A } & \text { Project B } \
\hline \text { Useful life } & 5 \text { years } & 5 \text { years } \
\hline \text { Present value of cash inflows } & \$ 84,360 & \$ 55,100 \
\hline \text { Present value of cash outflows } & \$ 77,000 & \$ 49,000 \
\hline & & \
\hline
\end{array}$$

Question

Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the project What is the present value index for project A?
$$\begin{array} { | l | l | l | } 
\hline & \text { Project A } & \text { Project B } \
\hline \text { Useful life } & 5 \text { years } & 5 \text { years } \
\hline \text { Present value of cash inflows } & \$ 84,360 & \$ 55,100 \
\hline \text { Present value of cash outflows } & \$ 77,000 & \$ 49,000 \
\hline & & \
\hline
\end{array}$$

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