A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax...

   

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A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: -Select- 0 -Select- 1 2 -Select- -$12,000 $4,000 $4,000 $4,000 $4,000 $4,000 Project M Project N -$36,000 $11,200 $11,200 $11,200 $11,200 $11,200 a. Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: Project N: $ Calculate IRR for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: Calculate MIRR for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: Calculate payback for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: years Calculate discounted payback for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: years b. Assuming the projects are independent, which one(s) would you recommend? % % % % years. 3 years 4 5 c. If the projects are mutually exclusive, which would you recommend? ✓ d. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR? A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: -Select- 0 -Select- 1 2 -Select- -$12,000 $4,000 $4,000 $4,000 $4,000 $4,000 Project M Project N -$36,000 $11,200 $11,200 $11,200 $11,200 $11,200 a. Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: Project N: $ Calculate IRR for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: Calculate MIRR for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: Calculate payback for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: years Calculate discounted payback for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: Project N: years b. Assuming the projects are independent, which one(s) would you recommend? % % % % years. 3 years 4 5 c. If the projects are mutually exclusive, which would you recommend? ✓ d. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?

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