Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5

Question:

Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.

Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) (Refer the below table) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
kilo years
Lima years
Oscar Years
Compute the net present value for each project. (Round computations and final answer for present value to 0 decimal places, e.g. 125. Round computations for Discount Factor to 5 decimal places. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
Kilo $
Lima $
Oscar $
Compute the annual rate of return for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Kilo %
Lima %
Oscar %

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... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...