You are considering two projects, A and B. Each project will cost $200,000, the WACC is 8.5%,

Question:

You are considering two projects, A and B. Each project will cost $200,000, the WACC is 8.5%, and the projected cash flows are as follows:

a. Calculate the payback period, discounted payback, NPV, PI, IRR, and MIRR. If A and B are mutually exclusive, which should be selected?

b. Create an NPV profile chart for projects A and B. What is the exact crossover rate for these two projects?

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Financial Analysis With Microsoft Excel

ISBN: 9780357442050

9th Edition

Authors: Timothy R. Mayes

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Question Posted: May 15, 2023 03:48 AM

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You are considering two projects, A and B. Each project will cost $200,000, the WACC is 8.5%,

Question:

Year 1 2 3 4 5 Project A $ 12,580 37,733 70,437 88,050 100,625 Project B $90,562 67,920 50,312 36,735 25,156

Step by Step Answer:

a Payback period Project A 2 years Project B 3 years Project A Initial investment recovered in 2 yea...View the full answer

Financial Analysis With Microsoft Excel

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