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CAPITAL BUDGETING CRITERIA

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:

$012345$

Project M $-$$$30,000$ $$10,000$ $$10,000$ $$10,000$ $$10,000$ $$10,000$

Project N $-$$$90,000$ $$28,000$ $$28,000$ $$28,000$ $$28,000$ $$28,000$

Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations.

Project M $

Project N $

Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations.

Project M $\%$

Project N $\%$

Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations.

Project M $\%$

Project N $\%$

Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations.

Project M years

Project N years

Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations.

Project M years

Project N years

Assuming the projects are independent, which one$($s$)$ would you recommend?

If the projects are mutually exclusive, which would you recommend?

Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?