Question
[The following information applies to the questions displayed below.] The following capital expenditure projects have been proposed for management's consideration at Scott Inc. for the
[The following information applies to the questions displayed below.] 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 | $ | (51,000 | ) | $ | (60,000 | ) | $ | (104,000 | ) | $ | (113,000 | ) | $ | (220,000 | ) | |||||
Amount of net cash return | 1 | 10,300 | 0 | 33,300 | 10,400 | 63,000 | |||||||||||||||
2 | 10,300 | 0 | 33,300 | 20,800 | 63,000 | ||||||||||||||||
3 | 10,300 | 20,800 | 33,300 | 31,200 | 31,500 | ||||||||||||||||
4 | 10,300 | 20,800 | 33,300 | 41,600 | 31,500 | ||||||||||||||||
5 | 10,300 | 20,800 | 33,300 | 52,000 | 31,500 | ||||||||||||||||
Per year | 6-10 | 10,300 | 12,500 | 0 | 0 | 31,500 | |||||||||||||||
NPV (12% discount rate) | $ | 7,197 | $ | ? | $ | ? | $ | ? | $ | 11,220 | |||||||||||
Present value ratio | 1.14 | ? | ? | ? | ? | ||||||||||||||||
Required: a. Calculate the net present value of projects B, C, and D, using 12% as the cost of capital for Scott Inc. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
b. Calculate the present value ratio for projects B, C, D, and E. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
c-2. $318,000 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
c-3. $534,000 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
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