Question
The following capital expenditure projects have been proposed for management's consideration at Scott Inc. for the upcoming budget year: Use Table 6-4 and Table 6-5.
The following capital expenditure projects have been proposed for management's consideration at Scott Inc. for the upcoming budget year: Use Table 6-4 and Table 6-5. (Use appropriate factor(s) from the tables provided. Round the PV factors to 4 decimals.)
Project | |||||||||||||||||||||
Year(s) | A | B | C | D | E | ||||||||||||||||
Initial investment | 0 | $ | (55,000 | ) | $ | (60,000 | ) | $ | (120,000 | ) | $ | (120,000 | ) | $ | (240,000 | ) | |||||
Amount of net cash return | 1 | 11,000 | 0 | 38,400 | 12,000 | 72,000 | |||||||||||||||
2 | 11,000 | 0 | 38,400 | 24,000 | 72,000 | ||||||||||||||||
3 | 11,000 | 24,000 | 38,400 | 36,000 | 36,000 | ||||||||||||||||
4 | 11,000 | 24,000 | 38,400 | 48,000 | 36,000 | ||||||||||||||||
5 | 11,000 | 24,000 | 38,400 | 60,000 | 36,000 | ||||||||||||||||
Per year | 6-10 | 11,000 | 14,400 | 0 | 0 | 36,000 | |||||||||||||||
NPV (14% discount rate) | $ | 2,377 | $ | ? | $ | ? | $ | ? | $ | 7,065 | |||||||||||
Present value ratio | 1.04 | ? | ? | ? | ? | ||||||||||||||||
$366,000 is available for investment? (You may select more than one answer. Single-click the box with the question mark to produce a checkmark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Project A
Project B
Project C
Project D
Project E
$610,000 is available for investment? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
- Project A
- Project B
- Project C
- Project D
- Project E
We know that:
Project Net Present Value of B, C, D are correct:
B$8,551
C$11,831
D$(7,121)
Present value ratio for projects B, C, D, and E are the following
B 1.14
C 1.10
D 0.94
E 1.03
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