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Please help compute the NPV

(a)

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(b)

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 $168,950 $179,850 $202,800 Annual net income:     Year 1 14,170 19,075 29,975 2 14,170 17,985 24,525 3 14,170 16,895 23,435 4 14,170 12,535 14,715 5 14,170 9,265 13,625 Total $70,850 $75,755 $106,275

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 the factor table.

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

Explanation / Answer

All the projects has negative NPV this indicates allprojects are loss making.

If we calculate payback period then we have to consider the cash inflows to recover our initial cash outflow, but in all the given projects we won't get inflows to recover our initial investment. (neither by non discounting cash flows nor by discounting cash flows)

Project KILO Year Cash Inflow PVF@ 15% PV 0 -168950 1 -168950 1 14170 0.87 12327.9 2 14170 0.756 10712.52 3 14170 0.658 9323.86 4 14170 0.572 8105.24 5 14170 0.497 7042.49 NPV -121438 Project LIMA Year Cash Inflow PVF@ 15% PV 0 -179850 1 -179850 1 19075 0.87 16595.25 2 17985 0.756 13596.66 3 16895 0.658 11116.91 4 12535 0.572 7170.02 5 9265 0.497 4604.705 NPV -126766 Project OSCAR Year Cash Inflow PVF@ 15% PV 0 -202800 1 -202800 1 29975 0.87 26078.25 2 24525 0.756 18540.9 3 23435 0.658 15420.23 4 14715 0.572 8416.98 5 13625 0.497 6771.625 NPV -127572

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