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

## Question:

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.

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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**Related Book For**

## Financial And Managerial Accounting

**ISBN:** 9781337119207

14th Edition

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

**Question Details**

Chapter #

**25**- Capital Investment AnalysisSection: Problem Set B

Problem: 3

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