NPV and IRR Analysis Cummings Products is considering two mutually exclusive Investments whose expected net cash flows are as follows: Year 0 Expected Net Cash Flows Project A Project B -$340 -5630 -528 210 -219 210 1 2 3 - 150 4 1,100 210 210 210 5 820 6 990 210 210 7 -325 B a. Select the correct graph for NPV profiles for Projects A and B. A VP (5) VPVC) 14007 1400 1200 12001 1000 1000 800 Piget 600 600 VPMO) 1400 1200 1000 BOO Post A Pot 600 990 210 210 -325 B VPVS) 1400 7 a. Select the correct graph for NPV profiles for Projects A and B A VPVS) VPM9) 1400 1400 1200 1200 1000+ 1000 800 Polecta 800 600 600+ 400 400 200 Project B 200+ 12001 1000+ Pret 800 Project 600 400 Projects Prict 200 25 30 200 Canecafa5 20 -5 -2004 -4001 Couter aliars 20 contrax 20 -4001 2004 -4001 D VPVS 1400 1200 1000! 800 Poject A 600! 4007 2007 Project B -5 -2007 costar per 5 20 25 30 200 -4001 The correct graph is graphs b. What is each projects IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: 22.55 % Project B: 27.12 c. Calculate the two projects News, If each project's cost of capital were 11%. Do not round intermediate calculations. Round your answers to the nearest cent Project A: $ 480.89 Project B: $ 359.56 which project, If either, should be selected? Project A should be selected. Calculate the two projects NP, If each project's cost of capital were 18%. Do not round intermediate cakulations. Round your answers to the nearest cent Project Als 154,46 Project B: $ 170.42 What would be the proper cholde? Project is the proper choice d. What is each project's MIRR at a cost of capital of 119.7 (t. Consider Perlod 7 as the end of Project t' site.) Do not found intermediate calculations Round your answers to two decimal places Project A Project B: What is ench project's MIRR at a cost of capital of 10%? (Hint: Consider Period 7 as the end of Project #'s 10.) Do not round intermediate 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 Project B: $ 170.42 What would be the proper choice? Project is the proper choice. d. What is each project's MIRR at a cost of capital of 1197 Hint: Consider Period 7 as the end of Projecte) Do not round Intermediate collations Round your answers to two decimal places. Project A Project B % What is each project's MIRR at a cost of capital of 10%? (pinti Consider Perled 7 as the end of Project #'s life.) Do not round intermediate calculations, Round your answers to two decimal places, Project A Project : e. What is the crossover rate? Do not round intermediate calculations. Round your answer to two decimal places. % What is its significance? 1. If the cost of capital is less than the crossover rate, both the NPV and IRR methods lead to the same project selections II. The crossover rate has no gignificance in capital budgeting analysis III. If the cost of capital is greater than the crossover rate, both the NPV and IRR methods will lead to the same project selection -Select