Question: NPV and IRR Analysis Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year

NPV and IRR Analysis

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	-$320	-$360
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.

Calculate the two projects' NPVs, if you were told that each project's cost of capital was 11%. Round your answers to the nearest cent.

Calculate the two projects' NPVs, if the cost of capital was 16%. Round your answers to the nearest cent.

What is each project's MIRR at a cost of capital of 11%? (Hint: Note that B is a 7-year project.) Round your answers to two decimal places. What is each project's MIRR at a cost of capital of 16%? (Hint: Note that B is a 7-year project.) Round your answer to two decimal places.

What is the crossover rate? Round your answer to two decimal places.

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