Question: Please answer in MS Excel with formulas 4. Capital Budgeting & Risk and Capital Budgeting (point 20%) LO-3: Calculate Time Value of Money, Common Stock

4. Capital Budgeting & Risk and Capital Budgeting (point 20%) LO-3: Calculate Time Value of Money, Common Stock Valuation, Bond Valuation, The Cost of Capital, Capital Budgeting, Risk and Capital Budgeting You are considering an investment in two projects, A and B. Both projects will cost $75,000, and the projected cash flows are as follows: Year 0 1 2 3 4 5 Project A Project B (75,000.00) (75,000.00) 7,500.00 38,000.00 15,000.00 27,000.00 28,000.00 20,000.00 35,000.00 15,000.00 40,000.00 10,000.00 Assuming that the WACC is 10%. a. Calculate the NPV, and IRR b. If the projects are mutually exclusive, which project should be selected in term of NPV? C. Create an NPV profile chart for projects A and B (Y Axis = NPV, X Axis = rate). What is the exact crossover rate for these two projects
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
