Second blank options:

Equity return

Crossover rate

Interest yield

Third blank options:

A

B

C

D

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 8%. 0 2 Project A Project B -1.500 -1,500 700 300 370 310 215 395 310 755 What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places. 96 What is the significance of this IRR? It is the -Select- after this point when mutually exclusive projects are considered there is no conflict in project acceptance between the NPV and IRR approaches. Review the graphs below. Select the graph that correctly represents the correct NPV profile for Projects A and B by using the following drop down menu. -Select- NPV Profiles A NPV Profiles B NPV Profiles C NPV Profiles D NPV 5 ($) 6001 500 400 300 2007 1000 INPV (5) 6001 500 400+ 300 2007 100 INPV 5 600 500 400 INPVIS ) 6007 500 400 300 200 1008 300 200+ 100 10 15 20 25 30 10 15 20 25 30 10 15 20 25 30 10 15 20 25 30 -100 -200 Cost of Capital Cost of Capital Cost of Capital Cost of Capital -1001 -2007 -300 -4001 -1001 -200 -300 -400 -100 -2007 -300 -4001 -300 -4001