Question: Need help completing the following tables and computing the crossover for the two projects. Your company is considering two mutually exclusive investment projects, each of
Need help completing the following tables and computing the crossover for the two projects.
Your company is considering two mutually exclusive investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows.
Year Project A Project B
0 -15,000,000 -15,000,000
1 5,000,000 10,000,000
2 10,000,000 10,000,000
3 20,000,000 10,000,000
Assume your cost of capital is 16%.
Complete the following table.
Project A Project B
1. Payback ________ ________
2. Discounted Payback ________ ________
3. NPV ________ ________
4. IRR ________ ________
5. MIRR ________ ________
6. Using the data from the above analysis, compute the crossover point for the two projects.
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