Alabama Technology has a weighted-average cost of capital of 8.16 percent and is evaluating two projects:...

 

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Alabama Technology has a weighted-average cost of capital of 8.16 percent and is evaluating two projects: A and B. Project A involves an initial investment of $36,100.00 and an expected cash flow of $63,300.00 in 4 years. Project A is considered more risky than an average-risk project at Alabama Technology, such that the appropriate discount rate for it is 5.56 percentage points different than the discount rate used for an average-risk project at Alabama Technology. The internal rate of return for project A is 10.07 percent. Project B involves an initial investment of $71,200.00 and an expected cash flow of $110,200.00 in 5 years. Project B is considered less risky than an average-risk project at Alabama Technology, such that the appropriate discount rate for it is 1.27 percentage points different than the discount rate used for an average-risk project at Alabama Technology. The internal rate of return for project B is 9.05 percent. What is X if X equals the NPV of project A plus the NPV of proiect B2 Alabama Technology has a weighted-average cost of capital of 8.16 percent and is evaluating two projects: A and B. Project A involves an initial investment of $36,100.00 and an expected cash flow of $63,300.00 in 4 years. Project A is considered more risky than an average-risk project at Alabama Technology, such that the appropriate discount rate for it is 5.56 percentage points different than the discount rate used for an average-risk project at Alabama Technology. The internal rate of return for project A is 10.07 percent. Project B involves an initial investment of $71,200.00 and an expected cash flow of $110,200.00 in 5 years. Project B is considered less risky than an average-risk project at Alabama Technology, such that the appropriate discount rate for it is 1.27 percentage points different than the discount rate used for an average-risk project at Alabama Technology. The internal rate of return for project B is 9.05 percent. What is X if X equals the NPV of project A plus the NPV of proiect B2

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