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First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related

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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:

First United Bank Inc. is evaluating three capital investment projects

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.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
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Computer System ExpansionUpgrade Expansion Branch Office ATM Kiosk Annual net cash flows 200,000 160,000 160,000 190,000 275000 180,000 250000 17 0,000 250,000

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Related Book For  answer-question
Financial And Managerial Accounting

Financial And Managerial Accounting

ISBN: 9781337119207

14th Edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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Question Details
Chapter # 25- Capital Investment Analysis
Section: Problem Set B
Problem: 3
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Question Posted: June 27, 2014 03:41:29
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