Question: can you explain on excel please? Your division is considering two investment projects. Because of the high inflation rate prevalent in Turkixe. you are conducting

can you explain on excel please?
can you explain on excel please? Your division is considering two investment

Your division is considering two investment projects. Because of the high inflation rate prevalent in Turkixe. you are conducting your analysis in US dollars. Your company's cost of capital is 11 percent and the projects' after-tax cash flows are as follows: a. (as poitat) Calculate the projects' NPVs, IRRs, MIRRs, regular paybacks, discounted paybacks and P/s. b. (5 peinti) If the two projects are independent, which project(s) should be chosen? c. (5 painb) If the two projects are mutually exclusive and the cost of capital is 11 percent, which project(s) should be chosen? d. (10 point) Plot NPV profiles for the two projects. Identify the projects' IRIs on the graph. e. (10 points) If the cost of capital was 5%, would this change your recommendation if the projects were mutually exclusive? If the cost of capital was 15%, would this change your recommendation? Explain your answers. f. (10 pratas) What is the crossover rate? Explain what this rate is and how it affects the cholce between mutually exclusive projects. g. (5 point) is it possible for conficts to exist between the NPV and IRR when independent projects are belng evaluated? Explatin your answer. h. (5 poim, Now consider the regular and discounted paybacks, Which projects looks better when judged by the paybacks? L. Es palms) If the payback was the only method a firm used to accept or reject projects, what payback should it choose as the cutolf point, that is, reject projects if their paybacks are not below the chosen cutofn Is your selected cutoff based on some economic criteria, or is it more or less arbitrary? Are the cutoff criteria equally arbitrary when firms use the NPV and/or the IRR as the criteria? Explain. 1. (5 patnt) What's the difference between the IRR and the MIRR, and which generally gives a better idea of the rate of return on the investment in a project? Explain. k. (5 poitos) Why do most academics and financial executives regard the NPV as being the single best criterion and better than the IRR? Why do companies still calculate IRRs

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!