Westco, Inc., is considering a capital investment project. Explain how each of the following objs. situations would affect the capital investment decision Westco is considering. Explain whether each situation would make the project more or less likely to be accepted. Consider each situation independently.

1. The net present value of the proposed investment is zero.

2. The estimated service life used to evaluate the investment was 10 years, when in reality the actual service life is 12 years. The investment was analyzed using the accounting rate of return model.

3. The company desires a \(12 \%\) return on the investment but inadvertently used a \(14 \%\) factor in its analysis. The company utilizes the net present value method of investment analysis.

4. In its original internal rate of return analysis of the investment Westco failed to consider the income tax effects of depreciation on the investment. The net present value model was used in the analysis.

5. The residual value of the project under consideration was estimated at \(\$ 30,000\), when in reality the actual residual value of the project is \(\$ 20,000\). The company utilized the net present value method of investment analysis.