#3 blank options for all (maintenance equipment, ramp facilities, computer network)

Net Present Value Method, Present Value Index, and Analysis for a service company Continental Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Maintenance Equipment $681,542 Ramp Facilities Computer Network Amount to be invested $437,366 $211,526 Annual net cash flows: Year 1 332,000 149,000 Year 2 309,000 282,000 246,000 221,000 197,000 Year 3 103,000 75,000 Year 1 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 2 3 4 5 0.747 0.621 0.492 0.402 0.567 0.507 6 0.705 0.564 0.335 0.432 0.376 2 0.665 0.513 0.452 0.279 0.233 B 0.627 0.467 0.404 0.327 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 20%, prepare a net present value analysis for each proposal. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest dollar. Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash flow Amount to be invested Net present value 2. Determine a present value index for each proposal. If required, round your answers to two decimal places Present Value Index Maintenance Equipment Ramp Facilities Computer Network 3. The has the largest present value index. Although has the largest net present value, it mutuess presente dollar invested than does the as revealed by the present value indexes. The present value index for the less than indicating that it does not meet the minimum rate of retum standard