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help me . explain pls . answer in order so not confused Net present value method, present value index, and analysis for a service company
help me explain pls answer in order so not confused
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 rnethod. Relevant data related to the proposals are summarized as follows: Amount to be invested Annual net cash flows: Year 1 Year 2 Year 3 Maintenance Equipment $894,861 436,000 405,000 371,000 Ramp Facilities $570,508 318,000 286,000 254,000 Computer Network $247,649 179,000 124,000 90,000 Present Value Of $1 at Compound Interest Year 6 9 10 Required: 6% 0.943 0.890 0.840 o. 792 0.747 0.705 0.665 0.627 0.592 0.558 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 O. 424 0.386 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 1. 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 above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest dollar. Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash now Less amount to be invested Net present value 2. Detemine a present value index for each proposal. If required, round your answers to two decimal places. Maintenance Equipment Ramp Facilities Computer Network 3. The dollar invested than does the present Value Index has the largest present value index. Although has the largest net present value, it retums less present value per , as revealed by the present value indexes. The present value index for iS less than 1, indicating that it does not meet the minimum rate of return standard.
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