Question: 6. ACME Industries is considering two mutually exclusive projects with the following net cash flows: Expected net cash flows Time Project A Project B 0

6. ACME Industries is considering two mutually exclusive projects with the following net cash flows:

Expected net cash flows

Time Project A Project B

0 ($375) ($575)

1 ($300) $190

2 ($200) $190

3 ($100) $190

4 $600 $190

5 $600 $190

6 $926 $190

7 ($200) $0

a) What is each projects NPV @ 12% cost of capital? Answer: NPVA= NPVB= Calculation:

b) What is each projects IRR? Answer: IRRA= IRRB= Calculation:

c) What is the crossover rate? Answer: Rate= Calculation:

d) What is each projects MIRR @ 12%? Answer: MIRRA= MIRRB= Calculation:

e) What is the regular payback period for these two projects?

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