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:

Line Item Description	Maintenance Equipment	Ramp Facilities	Computer Network
Amount to be invested	$880,256	$536,868	$269,279
Annual net cash flows:
Year 1	351,000	242,000	158,000
Year 2	326,000	218,000	109,000
Year 3	298,000	194,000	79,000

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	0.327	0.233
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 6%, 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.

Line Item Description	Maintenance Equipment	Ramp Facilities	Computer Network
Total present value of net cash flow	$	$	$
Less 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.

Line Item Description	Present Value Index
Maintenance Equipment
Ramp Facilities
Computer Network

3. The fill in the blank 1 of 4

maintenance equipmentramp facilitiescomputer network

has the largest present value index. Although fill in the blank 2 of 4

maintenance equipmentramp facilitiescomputer network

has the largest net present value, it returns less present value per dollar invested than does the fill in the blank 3 of 4

maintenance equipmentramp facilitiescomputer network

, as revealed by the present value indexes. The present value index for the fill in the blank 4 of 4

maintenance equipmentramp facilitiescomputer network

is less than 1, indicating that it does not meet the minimum rate of return standard.