Question: Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B
Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows:
| EXPECTED NET CASH FLOWS | ||
| Year | Project A | Project B |
| 0 | -$280 | -$430 |
| 1 | -387 | 134 |
| 2 | -193 | 134 |
| 3 | -100 | 134 |
| 4 | 600 | 134 |
| 5 | 600 | 134 |
| 6 | 850 | 134 |
| 7 | -180 | 134
What is each project's IRR? Round your answers to two decimal places. Project A % Project B % Calculate the two projects' NPVs, if you were told that each project's cost of capital was 10%. Round your answers to the nearest cent. Project A $ Project B $ Calculate the two projects' NPVs, if the cost of capital was 18%. Round your answers to the nearest cent. Project A $ Project B $
|
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
