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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 | $ | (61,000 | ) | $ | (72,000 | ) | $ | (137,000 | ) | $ | (150,000 | ) | $ | (288,000 | ) | |||||
Amount of net cash return | 1 | 12,800 | 0 | 46,100 | 14,400 | 87,000 | |||||||||||||||
2 | 12,800 | 0 | 46,100 | 28,800 | 87,000 | ||||||||||||||||
3 | 12,800 | 28,800 | 46,100 | 43,200 | 44,000 | ||||||||||||||||
4 | 12,800 | 28,800 | 46,100 | 57,600 | 44,000 | ||||||||||||||||
5 | 12,800 | 28,800 | 46,100 | 72,000 | 44,000 | ||||||||||||||||
Per year | 6-10 | 12,800 | 17,300 | 0 | 0 | 44,000 | |||||||||||||||
NPV (13% discount rate) | $ | 8,456 | $ | ? | $ | ? | $ | ? | $ | 22,487 | |||||||||||
Present value ratio | 1.14 | ? | ? | ? | ? | ||||||||||||||||
a. Calculate the net present value of projects B, C, and D, using 13% as the cost of capital for Scott Inc. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
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