Question: CH 25-3 Net Present Value Method, Present Value Index, and Analysis United Bankshores, Inc. wishes to evaluate three capital investment proposals by using the net

CH 25-3

Net Present Value Method, Present Value Index, and Analysis

United Bankshores, Inc. wishes to evaluate three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows:

CH 25-3 Net Present Value Method, Present Value Index, and Analysis United

Bankshores, Inc. wishes to evaluate three capital investment proposals by using the

net present value method. Relevant data related to the proposals are summarized

as follows: Branch Install Computer System Upgrade Internet Expansion Bill-Pay Amount to

Branch Install Computer System Upgrade Internet Expansion Bill-Pay Amount to be invested $879,009 $479,034 $289,226 Annual net cash flows: Year 1 Year 2 Year 3 343,000 319,000 292,000 230,000 207,000 184,000 158,000 109,000 79,000

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