Big Company is evaluating two projects, Project A and Project B. Both projects are of equal risk. Big Company has a WACC of 10%. The expected Free Cash Flows of the projects are as follows:

PeriodAnnual Cash Flows Project "A"Annual Cash Flows Project "B"0($30,000)($30,000)16,50016,50029,00010,500312,0009,000415,0003,000

Compute the Modified Internal Rate of Return (MIRR) for "A". Show your inputs/work for partial credit.

bgsu.instructure.com C 1 ma The Modified Internal Rate of Return of Project "B" is 11.67%. If Projects "A" and "B" are mutually exclusive, considering only the MIRR method, which project(s) should Big Company proceed with? Explain your answer. Edit View Insert Format Tools Table 12pt Paragraph BI U A & V TV : A & B should be selected as both have MIRR greater than WACC p # 12 words > D Question 35 2 pts Assuming Big Company's managers are sophisticated, and fully understand the strengths and weaknesses of all three capital budgeting models, given your answers to questions 28, 31, and 34, assuming that Projects "A" and "B" are mutually exclusive, which project would you recommend to senior management? Explain your answer. MacBook Air