1. (50%) Given the following information about four mutually exclusive projects that will be repeated indefinitely, complete the table information (the shaded blanks). Assume that all projects are equally risky and will have the same cost of capital. A and B are mutually exclusive of each other, but independent of C and D, which are mutually exclusive of each other. Which project(s) should be chosen? (Note: This question is not related to the previous question. That is to say that the WACC for this table is not necessarily the same as you calculated in the previous question. Hint: The starting point for this problem is to find the terminal value for project A and use that to find the cost of capital (WACC).)

	A	B	C	D
CF0	($2,700,000)	($1,850,000)	($1,800,000)	($2,650,000)
Inflows	$850,000			$700,000
Project Life	7	4	5
NPV		$900,000	$600,000
IRR				24.00%
MIRR	18.50%
Terminal Value
WACC