Problem 26-1A

U3 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.

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Problem 26-1A U3 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 Bono Project Edge Project Clayton $200,000 Capital investment $160,000 $175,000 Annual net income: 18,000 Year 1 14,000 27,000 14,000 17,000 23,000 14,000 21,000 16,000 14,000 12,000 13,000 5 14,000 9,000 12,000 $96,000 $70,000 $72,000 Total 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.) Click here to view PV table