Question related to Net Present Value Method, Present Value Index and Analysis. Please show your calculations and if possible explain your calculations/answers. Thanks!

The Rocky Hill Bank Board of Directors needs to evaluate 3 capital investment projects by using the ne present value method. Relevant data related to the projects are summarized below:

	Branch Office Expansion	Computer System Upgrade	Install Internet Bill-Pay
Amount to be invested	$528,437	$341,694	$226,172
Annual net cash flows:
Year 1	270,000	186,000	130,000
Year 2	251,000	167,000	90,000
Year 3	230,000	149,000	65,000

Present Value of $1 at Compund Interest

Year	6%	10%	12%	15%	20%
1	.943	.909	.893	.870	.833
2	.890	.826	.797	.756	.694
3	.840	.751	.712	.658	.579
4	.792	.683	.636	.572	.482
5	.747	.621	.567	.497	.402
6	.705	.564	.507	.432	.335
7	.665	.513	.452	.376	.279
8	.627	.467	.404	.327	.233
9	.592	.424	.361	.284	.194
10	.558	.386	.322	.247	.162

Question

Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value of $1 table above for calculations.

	Branch Office Expansion	Computer System Upgrade	Internet Bill-Pay System
Present value of net cash flow total
Amount to be invested
Net Present value

Then, determine a present value index for each proposal. Round your answers to the two decimal places.

	(Rounded) Present Value Index
Branch Office Expansion
Computer System Upgrade
Internet Bill-Pay System

What project has the largest present value index? Although the ______________ project 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.