Question: help please! Net Present Value Method, Present Value Index, and Analysis for a service company Continental Railroad Company is evaluating three capital investment proposals by



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 Ramp Computer Equipment Facilities Network Amount to be invested $1,075,028 $686,176 $322,658 Annual net cash flows: Year 1 450,000 329,000 202,000 Year 2 419,000 296,000 139,000 Year 3 383,000 263,000 101,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.694 0.756 3 0.840 0.751 0.712 0.658 0.579 0.683 0.572 4 0.792 0.636 0.482 5 0.621 0.497 0.747 0.567 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.279 0.513 0.452 0.376 Year 3 383,000 263,000 101,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.233 0.327 9 0.424 0.284 0.592 0.361 0.194 10 0.558 0.386 0.322 0.162 0.247 Required: 1. Assuming that the desired rate of retum is 10%, prepare a net present value analysis for each proposal. Use the present value of $1 renuired use the minussion In Indicato a nenative not recent value. If renuired round to the nearest dollar Previou 0.592 0.361 0.234 0.194 0.424 0.386 10 0.558 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 10%, prepare a net present value analysis for each proposal. Use the present value of 51 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 Present value of net cash flow total 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 returns less present value per dollar invested than does the as revealed by the present value Indexes. The present value index for the is less than 1, Indicating that it does not meet the minimum rate of return standard. Previous Next) Check My Work 4 more Check My Work uses remaining 9 0.592 0.424 0.361 0.284 0.194 10 0.322 0.247 0.558 0.386 0.162 Required: 1. Assuming that the desired rate of return is 10%, prepare a net present value analysis for each proposal. Use the present value of $1 table above. It 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 Present value of net cash flow total 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 returns less present value per dollar invested than does the as revealed by the present value indexes. The present value index for the is less than 1, indicating that it does not meet the minimum rate of return standard
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