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 Ramp Facilities Computer Network Amount to be invested $961,548 $550,988 $305,320 Annual net cash flows: Year 1 408,000 273,000 192,000 Year 2 379,000 246,000 132,000 Year 3 347,000 218,000 96,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.033 2 0.090 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 Check My Work eBook Print Item 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 10 0.558 0.386 0.322 0.284 0.194 0.247 0.162 Required: 1. Assuming that the desired rate of return is 12%, 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. Total present value of net cash flow Maintenance Equipment Ramp Facilities Computer Network 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 Networki 3. The computer network has the largest present value index. Although ramp facilities value per dollar invested than does the computer network has the largest net present value, it returns less present , as revealed by the present value indexes. The present value index for the Check My Work Previous Next>