Question: Project A B C D E Project Life 3 4 6 8 10 I(0) 800 1100 1600 1900 2700 CF(1) 300 310 313 300 357
| Project | A | B | C | D | E | |||||||
| Project Life | 3 | 4 | 6 | 8 | 10 | |||||||
| I(0) | 800 | 1100 | 1600 | 1900 | 2700 | |||||||
| CF(1) | 300 | 310 | 313 | 300 | 357 | |||||||
| CF(annual growth) | 4.0% | 3.5% | 3.0% | 1.0% | 0.0% | |||||||
| WACC | 7.0% | 6.5% | 6.1% | 5.5% | 5.0% | |||||||
| Reinvestment Rate | 5.0% | 5.0% | 5.0% | 5.0% | 5.0% | |||||||
| 1. Calculate the following | ||||||||||||
| a | NPV | |||||||||||
| b | IRR | |||||||||||
| c | MIRR | |||||||||||
| d | EAA | |||||||||||
| 2. Assuming all 5 projects are mutually exclusive and can be repeated. Based on your results, determine which project you should choose and why. | ||||||||||||
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