Question: please do it in excel 1. Projects Ss and LL have the following cash flows: WACC =r= 10% 0 SS LL 1 500 100 2

 please do it in excel 1. Projects Ss and LL have
the following cash flows: WACC =r= 10% 0 SS LL 1 500
100 2 300 300 3 100 600 If a 10% cost of
please do it in excel

1. Projects Ss and LL have the following cash flows: WACC =r= 10% 0 SS LL 1 500 100 2 300 300 3 100 600 If a 10% cost of capital is appropriate for both of them, what are their NPVs? NPV What project or set of projects would be in your capital budget if SS and LL were (a) independent or (b) mutually exclusive? What are the two projects' IRRs, and which one would the IRR method select if the firm has a 10% cost of capital and the projects are (a) independent or (b) mutually exclusive? IRR 2. Project MM has the following cash flows: 10% 0 1 2 3 -$1,000 $2,000 $2,000 $3,350 Calculate MM's NPV at discount rates of 0%, 10%, 12.2258%, 25%, 122.1470%, and 150%. What are MM's IRRs? If the cost of capital were 10%, should the project be accepted or rejected? NPV- NPV WACC 0 10% 12.2258% 25% 122.1470% 150% 3. The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. Net cash inflows are expected to be $27.7 million, all coming at the end of Year 1. The land must be returned to its natural state at a cost of $25 million, payable at the end of Year 2. Plot the project's NPV profile. b. Should the project be accepted if r=8% ? If r=14% ? Explain your reasoning. c. What is the project's MIRR at 8% ? At 14% ? Does the MIRR method lead to the same accept-reject decision as the NPV method? 0 4.4 1 27.7 2 -25 NPV 5% 8% 10% 14% 50% 100% 150% 200% 250% 300% 350% 400% 450% 8% = 14% r= 8% = 14% MIRR= MIRR=

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