Rolla Company has a choice of two investment alternatives. The present value of cash inflows...
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Accounting
Rolla Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternative is $125,000 and $100,000, respectively. The present value of cash inflows and outflows for the second alternative is $300,000 and $262,500, respectively.
Required
Calculate the net present value of each investment opportunity
Calculate the present value index for each investment opportunity. (Round "PVI" to 2 decimal places.)
Indicate which investment will produce the higher rate of return.
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