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Capital budgeting criteria A company has a 11% WACC and is considering two mutually exclu

Capital budgeting criteria A company has a 11% WACC and is considering two mutually exclu

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

What is each project's NPV? Round your answer to the nearest cent.
Project A $   
Project B $  

What is each project's IRR? Round your answer to two decimal places.
Project A  %
Project B  %

What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places.
Project A  %
Project B  %

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  %

Abhinav 03-Dec-2019

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