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 Ramp Maintenance Equipment $772,279 Computer Network Facilities Amount to be invested $508,202 $227,929 Annual net cash flows: Year 1 278,000 376,000 350,000 158,000 Year 2 250,000 109,000 Year 3 320,000 222,000 79,000 Year 6% 1 2. 3 Present Value of $1 at Compound Interest 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 4 5 6 7 B 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 20%, prepare a net present value analysis for each proposal. Use the present value of $1 table above. If required, use the mi the nearest dollar Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash flow 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 $1 table above. If required, use the minus the nearest dollar. Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash flow Amount to be invested E 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 computer network has the largest present value Index. Although ramp facilities has the largest net present value, it returns les present value per dollar investe the present value indexes. The present value Index for the maintenance equipment is less than 1, indicating that it does not meet the minimum rate of return standard, W 1. For each proposal, multiply the present value factor for each year (Refer Exhibit in the text) by that year's net cash flow. Subtract the amount to be invested from the total pre 2. Divide the total present value of the net cash flow by the amount to be invested 3. What does the present value index indicate about the net present value