A company has en 11% WACC and is considering two mutually exclusive investments (that cannot be...
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A company has en 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 + + + F Project -$300-$387 -$193 -$100 $600 $600 $850 -$180 A Project -$400 $133 $133 $133 $133 $133 $133 $0 B 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: $ 240.64 162.66 b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: 18.10 % 24.18 % 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: 14.59 % Project B: 16.54 % d. From your answers to parts a-c, which project would be selected? Project B If the WACC was 18%, which project would be selected? Project A 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. Discount Rate NPV Project A NPV Project B 0% 5 10 12 15 $ 890.00 $ 18.1 24.18 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: % % A company has en 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 + + + F Project -$300-$387 -$193 -$100 $600 $600 $850 -$180 A Project -$400 $133 $133 $133 $133 $133 $133 $0 B 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: $ 240.64 162.66 b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: 18.10 % 24.18 % 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: 14.59 % Project B: 16.54 % d. From your answers to parts a-c, which project would be selected? Project B If the WACC was 18%, which project would be selected? Project A 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. Discount Rate NPV Project A NPV Project B 0% 5 10 12 15 $ 890.00 $ 18.1 24.18 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: % %
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