Question: Expected Net Cash Flows Year Project A Project B 0 - $ 3 6 5 - $ 5 6 5 1 - 3 3 0

Expected Net Cash Flows
Year
Project A
Project B
0
-
$
3
6
5
-
$
5
6
5
1
-
3
3
0
1
8
0
2
-
2
2
0
1
8
0
3
-
1
1
0
1
8
0
4
6
6
0
1
8
0
5
6
6
0
1
8
0
6
9
5
8
1
8
0
7
-
2
2
0
1
8
0
A
.
)
If each project's cost of capital is
1
1
%
,
which project should be selected? Round your answers to the nearest cent.
NPV
(
Project A
)
: $
_
_
_
_
_
_
_
NPV
(
Project B
)
: $
_
_
_
_
_
_
_
_
_
_
_
B
.
)
If the cost of capital is
1
7
%
,
what project is the proper choice? Round your answers to the nearest cent.
NPV
(
Project A
)
: $
_
_
_
_
_
_
_
_
_
_
_
NPV
(
Project B
)
: $
_
_
_
_
_
_
_
_
_
_
_
_
What is each project's IRR? IRR function, set the guess parameter to be
1
0
%
.
)
Round your answers to two decimal places.
IRR
(
Project A
)
:
_
_
_
_
_
_
_
_
_
_
IRR
(
Project B
)
:
_
_
_
_
_
_
_
_
_
What is the crossover rate, and what is its significance?
(
IRR function, set the guess parameter to be
1
0
%
.
)
Round your answer for the crossover rate to two decimal places and for the NPV to the nearest cent.
The crossover rate is fill
_
_
_
_
_
_
_
_
_
.
The crossover rate represents the cost of capital at which the two projects have the NPV of $
_
_
_
_
_
_
_
_
_
_
What is each project's MIRR at a cost of capital of
1
1
%
?
At r
=
1
7
%
?
Round your answers to two decimal places.
Project A
Project B
MIRR at r
=
1
1
%
_
_
_
_
_
_
_
_
_
_
_
_
_
_
.
.
_
_
_
_
_
_
_
_
_
MIRR at r
=
1
7
%
_
_
_
_
_
_
_
_
_
_
.
.
_
_
_
_
_
_
_
_
_
_
_
_
_
_
What is the regular payback period for these two projects? Round your answers to two decimal places.
Regular payback period
(
Project A
)
:
_
_
_
_
_
_
_
_
_
_
_
Regular payback period
(
Project B
)
:
_
_
_
_
_
_
_
_
_
_
_
_
_
_
yearshe discounted payback period for these two projects? Round your answers to two decimal places.
Discounted payback period
(
Project A
)
:
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
Discounted payback period
(
Project B
)
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
What is the profitability index for each project if the cost of capital is
1
1
%
?
Round your answers to three decimal places.
Profitability index
(
Project A
)
:
_
_
_
_
_
_
_
_
_
_
_
Profitability index
(
Project B
)
:
_
_
_
_
_
_
_
_
_
_
_
_
_

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