Question: BUS 4070 Assessment 6 problem 1 Problem 1: Capital Budgeting Criteria XYZ Inc. is considering two projects. Its WACC is 12 percent, and the projects'

BUS 4070 Assessment 6 problem 1

Problem 1: Capital Budgeting Criteria

XYZ Inc. is considering two projects. Its WACC is 12 percent, and the projects' after-tax cash flows (in millions of dollars) would be as follows:

0 1 2 3 4
Project A -$30 $5 $10 $15 $20
Project B -$30 $20 $10 $8 $6

1). Calculate the projects' NPVs, IRRs, MIRRs, regular paybacks, and discounted paybacks.

2). How might conflicts exist between the NPV and the IRR when independent projects are evaluated? Explain your answer.

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