Atlantic Coast Railroad Company wishes to evaluate three capital investment proposals by using the net present value method. Relevant data related to the proposals are

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Atlantic Coast Railroad Company wishes to evaluate three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows:

Instructions1. 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 appearing in this chapter.2. Determine a present value index for each proposal. Round to two decimal places. 3. Which proposal offers the largest amount of present value per dollar of investment?Explain.

New Maintenance Yard Acquire Railcars Route Expansion Amount to be invested Annual net cash flows: Year 1 Year 2 Year 3 $45,000,000 $14,000,000 $25,000,000 18,500,000 14,500,000 10,800,000 7,400,000 6,000,000 5,500,000 32,000,000 24,500,000 15,800,000