Question: please answer and round correc Your division is considering two investment projects, each of which requires an up-front expenditure of $24 million. You estimate that
please answer and round correc
Your division is considering two investment projects, each of which requires an up-front expenditure of $24 million. You estimate that the cost of capital is 11% and that the investments will produce the following after-tax cash flows (in millions of dollars): a. What is the regular payback period for each of the projects? Round your answers to two decimal places. Project A: years Project B: years b. What is the discounted payback period for each of the projects? Do not round intermediate calculations. Round your answers to two decimal places. Project A: years Project B: years c. If the two projects are independent and the cost of capital is 11%, which project or projects should the firm undertake? The firm should undertake d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? The firm should undertake e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? The firm should undertake f. What is the crossover rate? Round your answer to two decimal places. (3) % g. If the cost of capital is 11%, what is the modified IRR (MIRR) of each project? Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: %
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
