The following capital expenditure projects have been proposed for management’s consideration at Scott Inc. for the upcoming budget year:

Required:
a. Calculate the net present value of projects B, C, and D, using 14% as the cost of capital for Scott Inc.
b. Calculate the present value ratio for projects B, C, D, and E.
c. Which projects would you recommend for investment if the cost of capital is 14% and
$50,000 is available for investment?
$150,000 is available for investment?
$250,000 is available for investment?

d. What additional factors (beyond those considered in parts a–c) might influence your project rankings?

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Initial investment Amount of net cash return Per year.... NPV (14% discount rate) Present value ratio *.***. Year(s) 0 1 2 3 4 5 6-10 A B $(25,000) $(25,000) 5,000 5,000 5,000 5,000 5,000 5,000 $ 1,081 1.04 0 0 16,000 5,000 16,000 10,000 10,000 16,000 15,000 10,000 16,000 20,000 10,000 16,000 25,000 6,000 0 0 LI ? Project C D E $(50,000) $(50,000) $(100,000) ? $ ? $ 30,000 30,000 15,000 15,000 15,000 15,000 ? $ 2,942