1. Assuming that the desired rate of return is 15%, 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 requir round to the nearest dollar. Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash flow 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. Present Value Index Maintenance Equipment Ramp Facilities Computer Network 3. The maintenance equipment has the largest present value index. Although maintenance equipment has the largest net present value, it returns less present value per dollar invested than does the maintenance equipment , as revealed by the present value indexes. The present value index for the maintenance equipment is less than 1, indicating that does not meet the minimum rate of return standard.

1. Assuming that the desired rate of return is 15%, 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 requir round to the nearest dollar. Maintenance Equipment Ramp Facilities Computer Network Total present value of net cash flow 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. Present Value Index Maintenance Equipment Ramp Facilities Computer Network 3. The maintenance equipment has the largest present value index. Although maintenance equipment has the largest net present value, it returns less present value per dollar invested than does the maintenance equipment , as revealed by the present value indexes. The present value index for the maintenance equipment is less than 1, indicating that does not meet the minimum rate of return standard.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.2P

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