Each project requires an investment of $64,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.
Required:
1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.
1b. Compute the net present value for each investment. Use the present value of $1 table present above. If required, round to the nearest dollar.
2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments.
Click here for the solution: The capital investment committee of Hampton Landscaping Company is considering two capital investments
