Question: First United Bank Inc is evaluating three capital investment projects

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:

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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