I am having trouble with this problem. I have included the reference tables that

Question

I am having trouble with this problem. I have included the reference tables that we are required to use. I will also include notes from the book. There may be many ways to figure out the answers but the book requires us to use their methods. One tutor has tried to help me prior but they were unsuccessful. I am using the textbook: Kimmel, Accounting: Tools for Decision Making, 5e. This is a problem from Chapter 24 Planning Capital Investments. It is Problem 24-1A. Please note the text in red.

Question:

Notes:

Reference Tables:

Explanation / Answer

Ans:

To summarize, the NPVs are:

Kilo: -2,193.25 (i.e. a negative value)

Lima: -3,780.51 (i.e. a negative value)

Oscar: 2,545.30

Hope this helped ! Let me know in case of any queries.

Project Kilo Year 1 Year 2 Year 3 Year 4 Year 5 Capital investment 149,400 Depreciation 29,880 Annual net income 14,034 14,034 14,034 14,034 14,034 Operating cash flow -149,400 43,914 43,914 43,914 43,914 43,914 Discounting factors                    1.00000    0.86957    0.75614    0.65752    0.57175    0.49718 PV of cashflows -149,400 38,186 33,205 28,874 25,108 21,833 NPV                 -2,193.25

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