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at Presente Method, present Value Index, and Analysis for a service company Continental Railroad Company is evaluating the capital investment proposals by using the net

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at Presente Method, present Value Index, and Analysis for a service company Continental Railroad Company is evaluating the capital investment proposals by using the net present value method: Relevant dota related to the proposals are summarized as follows: Maintenance Ramp Computer Equipment Facilities Network Amount to be invested $894,861 $530,1593 $250,005 Annual net cash flows: Year 1 436,000 301,000 179,000 Year 2 405,000 271,000 124,000 Year 371,000 241,000 00,000 Year 1 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.800 0.0126 0.792 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 0.497 0.402 0.567 0.507 6 0.705 0.566 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 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 51 table above. Ir required, use the minus sign to indicate a negative not 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 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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