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 summarized as

follows:

Present Value of $$1$ at Compound Interest

Required:

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.

Determine a present value index for each proposal. If required, round your answers to two decimal places.

Present Value Index

Maintenance Equipment

Ramp Facilities

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