Answer and Explanation:
a. The computation of the present value index for each proposal is given below:
As we know that
Present value index = Present Value of net cash Flow ÷ Amount invested
Therefore for each projects, it is Â
Particulars                     Des Moines       Cedar Rapids
Total present value of
net cash flow (A) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $712,500 Â Â Â Â Â Â Â Â $848,000
Amount invested (B) Â Â Â Â Â Â Â Â Â Â Â Â Â Â $750,000 Â Â Â Â Â Â Â $800,000
Present value index (A ÷ B)          0.95              1.06
b. Based on the present value index, Cedar Rapids would be needed the analysis support as it has the high present value index