Please show step by step how to solve the problem.

1.) The following net cash flows are projected for two independent projects. Your required rate of return is 12%. Year Project A Project B 0 ($130,000) ($650,000) 1 $30,000 $100,000 2 $30,000 $100,000 3 $30,000 $100,000 4 $40,000 $150,000 5 $40,000 $150,000 6 $30,000 $150,000 a. Calculate the payback period for each project. b. Calculate the NPV of each project. c. Calculate the IRR of each project.

d. Calculate the MIRR of each project e. Which project(s) if any would you accept and why?

Post your answers as below: these values are examples

Payback A: 8.9 years B: 9.2 years

NPV A: $40,000 B: $60,000

IRR A: 15.7% B: 17.7%

MIRR A: 15.1% B: 16.7%

since they are independent I would select ....

Answer:

rate 0.12 a. Calculate the payback period for each project. 3 3.33 b. Calculate the NPV of each project. $5,372 ($153,380) c. Calculate the IRR of each project. 13% 4% d. calculate the MIRR 13% 7% e. Which if any project(s) would you accept and why?

If the NPV is negative, that project should not be accepted.