Question: Please answer tbe blanks and show your work on the quantitative problem, thanks! For the paragraph I only need the anwsers that say select so
Business executives often prefer to work with percentage rate of return, so to overcome some of the IRR's limitations the modified TRR was devised. The MIRR equation is: - St. Cor.(10)** (- )" PVcosts _ TY (1-MRR)" While the IRR's reinvestment rate assumption is the TRR, the MIRR's reinvestment rate assumption is the project's WACC . As a result, the MIRR is generally a better Indicator of a project's true pretty than IRR. Unlike the IRR, there can never be more than one MIRR, and the MIRR can be compared with the project's cost when deciding to accept or reject projects. For independent projects, the NPV, IRR, and MIRR always reach the same accept/reject conclusion; so the three criteria are equally good when evaluating Select projects. If projects are mutually exclusive and they differ in size, conflicts in project acceptance Select arise. In these cases, the Select is the best decision method because it selects the project that maximizes firm value. Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11% 310 Project A Project B -950 950 600 200 400 335 260 410 250 What is Project A's MIRR? Do not round intermediate calculations. Round your answer to two decimal places What is Project ' MIRR) Do not round intermediate cakulations. Round your answer to two decimal places If the projects were independent, which project(s) would be accepted according to the MIRR method? If the projects were mutually exclusive, which project(s) would be accepted according to the MIRR method If the projects were independent, which project(s) would be accepted according to the MIRR method? Select If the projects were mutually exclusive, which project(s) would be accepted according to the MIRR method? Select- Neither Project A Project Both projects A and B Save & Continue
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