Question

First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows:


Instructions
1. 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 appearing in this chapter (Exhibit 1).
2. Determine a present value index for each project. Round to two decimal places.
3. Which project offers the largest amount of present value per dollar of investment?Explain.


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  • CreatedJune 27, 2014
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