A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the follow

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A Company Has A 13 Wacc And Is Considering Two Mutually Exclusive Investments That Cannot Be Repeated With The Follow 1 (41.65 KiB) Viewed 10 times

A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 Project A: -Select- 1 5 6 + + -$300 -$387 Project A Project B -$400 $134 -$100 $600 $134 $134 $600 $850 $134 $134 -$180 $0 a. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent. Project A: $ Project B: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Discount Rate 0% 5 10 12 15 2 + -$193 $134 18.1 24.51 Project B: c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: d. From your answers to parts a-c, which project would be selected? % $ % % % If the WACC was 18%, which project would be selected? -Select- e. Construct NPV profiles for Projects A and B. If an amount is zero, enter 0. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent. NPV Project B 3 % 4 NPV Project A 7 % f. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places. % $ g. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: