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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Net Present Value Method, Present Value Index, and Analysis for a service company
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