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: Amount to be invested Annual net cash flows: Year 1 Year 2 Year 3 Year 1 2 3 4 5 6 7 0.943 0.890 0.840 0.792 0.747 0.705 0.665 Maintenance Equipment $639,765 Present Value of $1 at Compound Interest 6% 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 291,000 271,000 247,000 12% 0.893 0.797 0.712 0.636 Ramp Facilities $401,807 0.567 0.507 0.452 207,000 I 186,000 166,000 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 Computer Network $197,753 131,000 90,000 66,000

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: 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