Problem

Calculate NPV—rank projects using present value ratios The following capital expendi...

Calculate NPV—rank projects using present value ratios 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 10% 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 10% and

1. $200,000 is available for investment?

2. $600,000 is available for investment?

3. $1,000,000 is available for investment?

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

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