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Capital budgeting criteria A company has a 11% WACC and is considering two mutually exclusive investments that cannot be repeated with the following cash flows

Capital budgeting criteria

A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

  0 1 2 3 4 5 6 7
                 
                 
Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180
Project B -$400 $131 $131 $131 $131 $131 $131 $0

Construct NPV profiles for Plans A and B. Round your answers to the nearest cent.

Discount Rate NPV Plan A NPV Plan B
0% $    $   
5 $    $   
10 $    $   
12 $    $   
15 $    $   
18.1 $    $   
23.54 $    $   

Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places.
%

What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places.
Project A  %
Project B  %

 

Jun 01 2020 View more View Less

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