Question: Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows: a. Sefiest the correct gratih for NPV profiles lor



Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows: a. Sefiest the correct gratih for NPV profiles lor Progects A and A. b. What is each project's IRR? Do not round intermediate caiculations. Round your answers to two decimal places. Project A: % Project B: c. Calculate the two projects' NPVs, if each project's cost of capital were 11%. Do not round intermediate calculations. Round your answers nearest cent. Project A: $ Project B: $ Which project, if either, should be selected? should be selected. Calculate the two projects' NPVs, If each project's cost of capital were 16%. Do not round intermediate calculations. Round your answers nearest cent. Project A:$ Project B: $ What would be the proper choice? is the proper choice. d. What is each project's MIRR at a cost of capital of 11% ? (Hint: Consider Perigd 7 as the end of Project B's life.) Do not round interm calculations, Round vour answers to two decimal places. Project A: % Project B: What is each project's MIRR at a cost of capital of 16% ? (Hint: Consider Period 7 as the end of Project B's life.) Do not round interm calculations. Round your answers to two decimal places. Project A: % Project B: e. What is the crossover rate? Do not round intermediate calculations. Round your answer to two decimal places. % What is its significance? I. If the cost of capital is greater than the crossover rate, both the NPV and IRR methods will lead to the same project selection. II. If the cost of capital is less than the crossover rate, both the NPV and IRR methods lead to the same project selections. III. The crossover rate has no significance in capital budgeting analysis
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