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

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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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Financial And Managerial Accounting

ISBN: 9781337119207

14th Edition

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

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