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) B D E $ (50,000) 16,000 16,000 16,000 16,000 16,000 $ (50,000) 5,000 10,000 15,000 20,000 25,000 Initial investment Amount of net cash return $(25,000) 5,000 5,000 5,000 5,000 5,000 5,000 $ 1,081 $(25,000) $(100,000) 30,000 2 30,000 15,000 15,000 3 10,000 10,000 4 10,000 6,000 15,000 15,000 Per year NPV (14% discount rate) 6-10 2,942 Present value ratio 1.04 b. Calculate the present value ratio for projects B, C, D, and E. (Round your answers to 2 decimal places.)
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) B D E $ (50,000) 16,000 16,000 16,000 16,000 16,000 $ (50,000) 5,000 10,000 15,000 20,000 25,000 Initial investment Amount of net cash return $(25,000) 5,000 5,000 5,000 5,000 5,000 5,000 $ 1,081 $(25,000) $(100,000) 30,000 2 30,000 15,000 15,000 3 10,000 10,000 4 10,000 6,000 15,000 15,000 Per year NPV (14% discount rate) 6-10 2,942 Present value ratio 1.04 b. Calculate the present value ratio for projects B, C, D, and E. (Round your answers to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![Required information
[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)
D
E
$ (25,000)
5,000
5,000
5,000
5,000
5,000
5,000
$ 1,081
$ (25,000)
$ (50,000)
$ (50,000)
5,000
10,000
15,000
20,000
25,000
Initial investment
$(100,000)
30,000
30,000
Amount of net cash return
16,000
16,000
16,000
16,000
16,000
10,000
15,000
10,000
10,000
6,000
15,000
15,000
5
Per year
6-10
15,000
NPV (14% discount rate)
$ 2,942
Present value ratio
1.04
b. Calculate the present value ratio for projects B, C, D, and E. (Round your answers to 2 decimal places.)
Project
Present Value
Ratio
B
D
E](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F354988b1-49b5-4361-999f-1aaef20d6b01%2F6987f868-3a7f-4830-82e6-4fbe4bc7baee%2Fav70tlq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[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)
D
E
$ (25,000)
5,000
5,000
5,000
5,000
5,000
5,000
$ 1,081
$ (25,000)
$ (50,000)
$ (50,000)
5,000
10,000
15,000
20,000
25,000
Initial investment
$(100,000)
30,000
30,000
Amount of net cash return
16,000
16,000
16,000
16,000
16,000
10,000
15,000
10,000
10,000
6,000
15,000
15,000
5
Per year
6-10
15,000
NPV (14% discount rate)
$ 2,942
Present value ratio
1.04
b. Calculate the present value ratio for projects B, C, D, and E. (Round your answers to 2 decimal places.)
Project
Present Value
Ratio
B
D
E
![TABLE 6.5
FACTORS FOR CALCULATING THE PRESENT VALUE OF AN ANNUITY OF $1
TABLE 6.4
FACTORS FOR CALCULATING THE PRESENT VALUE OF $1
Discount Rate
Discount Rate
No. of
Periods
No. of
Periods
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0.980
0.9615
0.9434
0.9259
0.9091
0.8929
0.8772
0.8621
0.8475
0.8333
1
0.980
0.9615
0.9434
0.9259
0.9091
0.8929
0.8772
0.8621
0.8475
0.8333
2
1.942
1.8861
1.8334
1.7833
1.7355
1.6901
1.5278
2
0.961
0.9246
0.8900
0.8573
0.8264
0.7972
0.7695
0.7432
0.7182
0.6944
1.6467
1.6052
1.5656
3
2.884
2.7751
2.6730
2.5771
2.4869
2.4018
2.3216
2.2459
2.1743
2.1065
3
0.942
0.8890
0.8396
0.7938
0.7513
0.7118
0.6750
0.6407
0.6086
0.5787
4
3.808
3.6299
3.4651
3.3121
3.1699
3.0373
2.9137
2.7982
2.6901
2.5887
4
0.924
0.8548
0.7921
0.7350
0.6830
0.6355
0.5921
0.5523
0.5158
0.4823
4.713
4.4518
4.2124
3.9927
3.7908
3.6048
3.4331
3.2743
3.1272
2,9906
5
0.906
0.8219
0.7473
0.6806
0.6209
0.5674
0.5194
0.4761
0.4371
0.4019
0.888
0.7903
0.7050
0.6302
0.5645
0.5066
0.4556
0.4104
0.3704
0.3349
5.601
5.2421
4.9173
4.6229
4.3553
4.1114
3.8887
3.6847
3.4976
3.3255
7
0.871
0.7599
0.6651
0.5835
0.5132
0.4523
0.3996
0.3538
0.3139
0.2791
7
6.472
6.0021
5.5824
5.2064
4.8684
4.5638
4.2883
4.0386
3.8115
3.6046
0.853
0.7307
0.6274
0.5403
0.4665
0.4039
0.3506
0.3050
0.2660
0.2326
8
7.325
6.7327
6.2098
5.7466
5.3349
4.9676
4.6389
4.3436
4.0776
3.8372
9
0.837
0.7026
0.5919
0.5002
0.4241
0.3606
0.3075
0.2630
0.2255
0.1938
8.162
7.4353
6.8017
6.2469
5.7590
5.3282
4.9464
4.6065
4.3030
4.0310
10
0.820
0.6756
0.5584
0.4632
0.3855
0.3220
0.2697
0.2267
0.1911
0.1615
10
8.983
8.1109
7.3601
6.7101
6.1446
5.6502
5.2161
4.8332
4.4941
4.1925
11
0.804
0.6496
0.5268
0.4289
0.3505
0.2875
0.2366
0.1954
0.1619
0.1346
11
9.787
8.7605
7.8869
7.1390
6.4951
5.9377
5.4527
5.0286
4.6560
4.3271
12
0.788
0.6246
0.4970
0.3971
0.3186
0.2567
0.2076
0.1685
0.1372
0.1122
12
10.575
9.3851
8.3838
7.5361
6.8137
6.1944
5.6603
5.1971
4.7932
4.4392
13
0.773
0.6006
0.4688
0.3677
0.2897
0.2292
0.1821
0.1452
0.1163
0.0935
13
11.348
9.9856
8.8527
7.9038
7.1034
6.4235
5.8424
5.3423
4.9095
4.5327
14
0.758
0.5775
0.4423
0.3405
0.2633
0.2046
0.1597
0.1252
0.0985
0.0779
14
12.106
10.5631
9.2950
8.2442
7.3667
6.6282
6.0021
5.4675
5.0081
4.6106
15
0.743
0.5553
0.4173
0.3152
0.2394
0.1827
0.1401
0.1079
0.0835
0.0649
15
12.849
11.1184 9.7122
8.5595
7.6061
6.8109
6.1422
5.5755
5.0916
4.6755
16
0.728
0.5339
0.3936
0.2919
0.2176
0.1631
0.1229
0.0930
0.0708
0.0541
16
13.578
11.6523 10.1059
8.8514
7.8237
6.9740
6.2651
5.6685
5.1624
4.7296
17
0.714
0.5134
0.3714
0.2703
0.1978
0.1456
0.1078
0.0802
0.0600
0.0451
17
14.292
12.1657 10.4773
9.1216
8.0216
7.1196
6.3729
5.7487
5.2223
4.7746
18
0.700
0.4936
0.3503
0.2502
0.1799
0.1300
0.0946
0.0691
0.0508
0.0376
18
14.992
12.6593 10.8276
9.3719
8.2014
7.2497
6.4674
5.8178
5.2732
4.8122
19
0.686
0.4746
0.3305
0.2317
0.1635
0.1161
0.0829
0.0596
0.0431
0.0313
19
15.678
13.1339 11.1581
9.6036
8.3649
7.3658
6.5504
5.8775
5.3162
4.8435
20
0.673
0.4564
0.3118
0.2145
0.1486
0.1037
0.0728
0.0514
0.0365
0.0261
20
16.351
13.5903 11.4699
9.8181
8.5136
7.4694
6.6231
5.9288
5.3527
4.8696
21
0.660
0.4388
0.2942
0.1987
0.1351
0.0926
0.0638
0.0443
0.0309
0.0217
21
17.011
14.0292 11.7641
10.0168
8.6487
7.5620
6.6870
5.9731
5.3837
4.8913
22
0.647
0.4220
0.2775
0.1839
0.1228
0.0826
0.0560
0.0382
0.0262
0.0181
22
17.658
14.4511 12.0416
10.2007
8.7715
7.6446
6.7429
6.0113
5.4099
4.9094
23
0.634
0.4057
0.2618
0.1703
0.1117
0.0738
0.0491
0.0329
0.0222
0.0151
23
18.292
14.8568 12.3034
10.3711
8.8832
7.7184
6.7921
6.0442
5.4321
4.9245
24
0.622
0.3901
0.2470
0.1577
0.1015
0.0659
0.0431
0.0284
0.0188
0.0126
24
18.914
15.2470 12.5504
10.5288
8.9847
7.7843
6.8351
6.0726
5.4509
4.9371
25
0.610
0.3751
0.2330
0.1460
0.0923
0.0588
0.0378
0.0245
0.0160
0.0105
25
19.523
15.6221 12.7834
10.6748
9.0770
7.8431
6.8729
6.0971
5.4669
4.9476
30
0.552
0.3083
0.1741
0.0994
0.0573
0.0334
0.0196
0.0116
0.0070
0.0042
30
22.396
17.2920 13.7648 11.2578
9.4269
8.0552
7.0027
6.1772
5.5168
4.9789
35
0.500
0.2534
0.1301
0.0676
0.0356
0.0189
0.0102
0.0055
0.0030
0.0017
35
24.999
18.6646 14.4982 11.6546
9.6442
8.1755
7.0700
6.2153
5.5386
4.9915
40
0.453
0.2083
0.0972
0.0460
0.0221
0.0107
0.0053
0.0026
0.0013
0.0007
40
27.355
19.7928 15.0463
11.9246
9.7791
8.2438
7.1050
6.2335
5.5482
4.9966
45
0.410
0.1712
0.0727
0.0313
0.0137
0.0061
0.0027
0.0013
0.0006
0.0003
45
29.490 20.7200 15.4558 12.1084
9.8628
8.2825
7.1232
6.2421
5.5523
4.9986
50
0.372
0.1407
0.0543
0.0213
0.0085
0.0035
0.0014
0.0006
0.0003
0.0001
50
31.424
21.4822 15.7619
12.2335
9.9148
8.3045
7.1327
6.2463
5.5541
4.9995](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F354988b1-49b5-4361-999f-1aaef20d6b01%2F6987f868-3a7f-4830-82e6-4fbe4bc7baee%2F019gmhq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TABLE 6.5
FACTORS FOR CALCULATING THE PRESENT VALUE OF AN ANNUITY OF $1
TABLE 6.4
FACTORS FOR CALCULATING THE PRESENT VALUE OF $1
Discount Rate
Discount Rate
No. of
Periods
No. of
Periods
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0.980
0.9615
0.9434
0.9259
0.9091
0.8929
0.8772
0.8621
0.8475
0.8333
1
0.980
0.9615
0.9434
0.9259
0.9091
0.8929
0.8772
0.8621
0.8475
0.8333
2
1.942
1.8861
1.8334
1.7833
1.7355
1.6901
1.5278
2
0.961
0.9246
0.8900
0.8573
0.8264
0.7972
0.7695
0.7432
0.7182
0.6944
1.6467
1.6052
1.5656
3
2.884
2.7751
2.6730
2.5771
2.4869
2.4018
2.3216
2.2459
2.1743
2.1065
3
0.942
0.8890
0.8396
0.7938
0.7513
0.7118
0.6750
0.6407
0.6086
0.5787
4
3.808
3.6299
3.4651
3.3121
3.1699
3.0373
2.9137
2.7982
2.6901
2.5887
4
0.924
0.8548
0.7921
0.7350
0.6830
0.6355
0.5921
0.5523
0.5158
0.4823
4.713
4.4518
4.2124
3.9927
3.7908
3.6048
3.4331
3.2743
3.1272
2,9906
5
0.906
0.8219
0.7473
0.6806
0.6209
0.5674
0.5194
0.4761
0.4371
0.4019
0.888
0.7903
0.7050
0.6302
0.5645
0.5066
0.4556
0.4104
0.3704
0.3349
5.601
5.2421
4.9173
4.6229
4.3553
4.1114
3.8887
3.6847
3.4976
3.3255
7
0.871
0.7599
0.6651
0.5835
0.5132
0.4523
0.3996
0.3538
0.3139
0.2791
7
6.472
6.0021
5.5824
5.2064
4.8684
4.5638
4.2883
4.0386
3.8115
3.6046
0.853
0.7307
0.6274
0.5403
0.4665
0.4039
0.3506
0.3050
0.2660
0.2326
8
7.325
6.7327
6.2098
5.7466
5.3349
4.9676
4.6389
4.3436
4.0776
3.8372
9
0.837
0.7026
0.5919
0.5002
0.4241
0.3606
0.3075
0.2630
0.2255
0.1938
8.162
7.4353
6.8017
6.2469
5.7590
5.3282
4.9464
4.6065
4.3030
4.0310
10
0.820
0.6756
0.5584
0.4632
0.3855
0.3220
0.2697
0.2267
0.1911
0.1615
10
8.983
8.1109
7.3601
6.7101
6.1446
5.6502
5.2161
4.8332
4.4941
4.1925
11
0.804
0.6496
0.5268
0.4289
0.3505
0.2875
0.2366
0.1954
0.1619
0.1346
11
9.787
8.7605
7.8869
7.1390
6.4951
5.9377
5.4527
5.0286
4.6560
4.3271
12
0.788
0.6246
0.4970
0.3971
0.3186
0.2567
0.2076
0.1685
0.1372
0.1122
12
10.575
9.3851
8.3838
7.5361
6.8137
6.1944
5.6603
5.1971
4.7932
4.4392
13
0.773
0.6006
0.4688
0.3677
0.2897
0.2292
0.1821
0.1452
0.1163
0.0935
13
11.348
9.9856
8.8527
7.9038
7.1034
6.4235
5.8424
5.3423
4.9095
4.5327
14
0.758
0.5775
0.4423
0.3405
0.2633
0.2046
0.1597
0.1252
0.0985
0.0779
14
12.106
10.5631
9.2950
8.2442
7.3667
6.6282
6.0021
5.4675
5.0081
4.6106
15
0.743
0.5553
0.4173
0.3152
0.2394
0.1827
0.1401
0.1079
0.0835
0.0649
15
12.849
11.1184 9.7122
8.5595
7.6061
6.8109
6.1422
5.5755
5.0916
4.6755
16
0.728
0.5339
0.3936
0.2919
0.2176
0.1631
0.1229
0.0930
0.0708
0.0541
16
13.578
11.6523 10.1059
8.8514
7.8237
6.9740
6.2651
5.6685
5.1624
4.7296
17
0.714
0.5134
0.3714
0.2703
0.1978
0.1456
0.1078
0.0802
0.0600
0.0451
17
14.292
12.1657 10.4773
9.1216
8.0216
7.1196
6.3729
5.7487
5.2223
4.7746
18
0.700
0.4936
0.3503
0.2502
0.1799
0.1300
0.0946
0.0691
0.0508
0.0376
18
14.992
12.6593 10.8276
9.3719
8.2014
7.2497
6.4674
5.8178
5.2732
4.8122
19
0.686
0.4746
0.3305
0.2317
0.1635
0.1161
0.0829
0.0596
0.0431
0.0313
19
15.678
13.1339 11.1581
9.6036
8.3649
7.3658
6.5504
5.8775
5.3162
4.8435
20
0.673
0.4564
0.3118
0.2145
0.1486
0.1037
0.0728
0.0514
0.0365
0.0261
20
16.351
13.5903 11.4699
9.8181
8.5136
7.4694
6.6231
5.9288
5.3527
4.8696
21
0.660
0.4388
0.2942
0.1987
0.1351
0.0926
0.0638
0.0443
0.0309
0.0217
21
17.011
14.0292 11.7641
10.0168
8.6487
7.5620
6.6870
5.9731
5.3837
4.8913
22
0.647
0.4220
0.2775
0.1839
0.1228
0.0826
0.0560
0.0382
0.0262
0.0181
22
17.658
14.4511 12.0416
10.2007
8.7715
7.6446
6.7429
6.0113
5.4099
4.9094
23
0.634
0.4057
0.2618
0.1703
0.1117
0.0738
0.0491
0.0329
0.0222
0.0151
23
18.292
14.8568 12.3034
10.3711
8.8832
7.7184
6.7921
6.0442
5.4321
4.9245
24
0.622
0.3901
0.2470
0.1577
0.1015
0.0659
0.0431
0.0284
0.0188
0.0126
24
18.914
15.2470 12.5504
10.5288
8.9847
7.7843
6.8351
6.0726
5.4509
4.9371
25
0.610
0.3751
0.2330
0.1460
0.0923
0.0588
0.0378
0.0245
0.0160
0.0105
25
19.523
15.6221 12.7834
10.6748
9.0770
7.8431
6.8729
6.0971
5.4669
4.9476
30
0.552
0.3083
0.1741
0.0994
0.0573
0.0334
0.0196
0.0116
0.0070
0.0042
30
22.396
17.2920 13.7648 11.2578
9.4269
8.0552
7.0027
6.1772
5.5168
4.9789
35
0.500
0.2534
0.1301
0.0676
0.0356
0.0189
0.0102
0.0055
0.0030
0.0017
35
24.999
18.6646 14.4982 11.6546
9.6442
8.1755
7.0700
6.2153
5.5386
4.9915
40
0.453
0.2083
0.0972
0.0460
0.0221
0.0107
0.0053
0.0026
0.0013
0.0007
40
27.355
19.7928 15.0463
11.9246
9.7791
8.2438
7.1050
6.2335
5.5482
4.9966
45
0.410
0.1712
0.0727
0.0313
0.0137
0.0061
0.0027
0.0013
0.0006
0.0003
45
29.490 20.7200 15.4558 12.1084
9.8628
8.2825
7.1232
6.2421
5.5523
4.9986
50
0.372
0.1407
0.0543
0.0213
0.0085
0.0035
0.0014
0.0006
0.0003
0.0001
50
31.424
21.4822 15.7619
12.2335
9.9148
8.3045
7.1327
6.2463
5.5541
4.9995
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