Henkel Company is considering three long-term capital investment proposals. Each

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.




Project Kilo
Project Lima Project Oscar
Capital investment

  $165,850
$176,550
$202,800 Annual net income:




    Year 1
13,910 18,725
29,425
2
13,910 17,655
24,075

3
13,910 16,585
23,005

4
13,910 12,305
14,445

5
13,910 9,095
13,375
  Total
$69,550 $74,365
$104,325


Depreciation is computed by the straight-line method with no salvage value. The company 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

  $165,850
$176,550
$202,800 Annual net income:




    Year 1
13,910 18,725
29,425
2
13,910 17,655
24,075

3
13,910 16,585
23,005

4
13,910 12,305
14,445

5
13,910 9,095
13,375
  Total
$69,550 $74,365
$104,325


Depreciation is computed by the straight-line method with no salvage value. The company 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

  $165,850
$176,550
$202,800 Annual net income:




    Year 1
13,910 18,725
29,425
2
13,910 17,655
24,075

3
13,910 16,585
23,005

4
13,910 12,305
14,445

5
13,910 9,095
13,375
  Total
$69,550 $74,365
$104,325


Depreciation is computed by the straight-line method with no salvage value. The company 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

  $165,850
$176,550
$202,800 Annual net income:




    Year 1
13,910 18,725
29,425
2
13,910 17,655
24,075

3
13,910 16,585
23,005

4
13,910 12,305
14,445

5
13,910 9,095
13,375
  Total
$69,550 $74,365
$104,325


Depreciation is computed by the straight-line method with no salvage value. The company

Explanation / Answer

YEAR

OSCAR

YEAR

OSCAR

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