Problem 24-1A

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 $162,750 $173,250 $202,800

Annual net income:

Year1 13,650 18,375 28,875

2 13,650 17,325 23,625

3 13,650 16,275 22,575

4 13,650 12,075 14,175

5 13,650 8,925 13,125

Total $68,250 $72,975 $102,375

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.)

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

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Compute the cash payback period for each project.(Round answers to 2 decimal places, e.g. 10.50.)

Project Kilo years

Project Lima years

Project Oscar years

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Compute the net present value for each project.(Round answers to 0 decimal places, e.g. 125.If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)

$ $ $

Project Kilo Project Lima Project Oscar

Net present value

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Compute the annual rate of return for each project. (Hint:Use average annual net income in your computation.)(Round answers to 2 decimal places, e.g. 10.50.)

% % %

Project Kilo Project Lima Project Oscar

Annual rate of return