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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
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.
|
|
|
| Project Kilo |
| Project Lima | Project Oscar |
| |||
| Capital investment |
|
| $156,550 |
| $166,650 |
| $198,900 |
| ||
| Annual net income: |
|
|
|
|
|
|
| |||
| Year | 1 |
| 13,130 |
| 17,675 |
| 27,775 |
| ||
|
| 2 |
| 13,130 |
| 16,665 |
| 22,725 |
| ||
|
| 3 |
| 13,130 |
| 15,655 |
| 21,715 |
| ||
|
| 4 |
| 13,130 |
| 11,615 |
| 13,635 |
| ||
|
| 5 |
| 13,130 |
| 8,585 |
| 12,625 |
| ||
| Total |
| $65,650 |
| $70,195 |
| $98,475 |
| |||
Depreciation is computed by the straight-line method with no salvage value. The company
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